Employers turn to workers to help slow health cost growth

The average deductible for workers who face one is higher for workers in small firms (three to 199 employers) than in large firms ($2,069 vs. $1,238). The study found the average deductible rose 12% to $1,478 annually for covered workers who have them. Of that, employees pay an average of $5,277. In them, patients and employers generally pay less toward the premium, or cost of the coverage itself. Almost two thirds (64 percent) of large employers offering health benefits say that they conducted an analysis to determine if any of their plans would exceed the Cadillac tax thresholds, and a quarter (27 percent) of this group say their largest plan would do so.

But the newest Kaiser survey highlights the effects of another shift: the continuing growth of plans that involve higher out-of-pocket costs in the form of deductibles. High-deductible plans typically have significantly lower premiums than other types of plans. By contrast, the employer market – where the majority of Americans get their coverage – seems like a bastion of stability. That compares to 20 percent in 2014, according to the survey. Employers and some analysts argue that high deductibles, copays and coinsurance rates-all cost-sharing mechanisms that give consumers more “skin in the game”-spur people to think more about costs and reduce unnecessary healthcare services”.

The amount employees are paying for healthcare is rising, according to a new report by the Kaiser Family Foundation.

“There’s been a gradual sea change in what insurance is for most Americans, from more comprehensive coverage to skimpier coverage”, Drew Altman, president of the Kaiser Family Foundation, told NPR. Out-of-pocket costs similarly outpaced wages. A year ago premiums went up by about the same amount your paycheck may have gone up, an average of 3 percent. Yet deductibles are just one piece of the health insurance spending story.

At the same time, fewer workers are enrolled in preferred provider organization plans, which tend to have higher premiums and wider networks, the analysis says. About 50 percent of employees are in plans that have deductibles of at least $1,000 for individual coverage, up from 45 percent in 2015. The effect of those high deductibles is mediated in some plans by employer contributions to health savings accounts.

The idea behind these high-deductible plans is what economists call “skin in the game”. People with higher salaries, who have the means to funnel money into an HSA, could conceivably use those accounts as a supplement to their retirement income. Delaney said about two-thirds of the employees participate in the wellness program, which has been offered for three years. Lower-income workers often worry about other day-to-day expenses instead of saving for an HSA. It also showed that the share of employers that offer health benefits, at 56% this year, remained roughly the same as last year.

State health insurance exchanges created under the new health care law are in turmoil.

Some employers incentivize their workers toward preventative measures, such as exercising more and trying nutrition plans, by offering to pay half an employee’s deductible if he or she goes through an annual health risk assessment. If the average age of a company’s employees rose or fell significantly – quite possible in a business with 10 or fewer employees – that could also affect the outcome.