People with work-based health insurance are paying much bigger deductibles than they used to.
Those with single coverage are paying an average deductible this year of $1,318, up some 40 percent since 2010, when the total was $917, according to national data released Tuesday.
It’s the key reason why many Americans haven’t felt much benefit in recent years as growth in health care spending has slowed, said the report from the California-based Kaiser Family Foundation.
Health insurance premiums this year are up by about 4 percent, with the annual cost of family coverage in employer plans growing to $17,545. Workers are covering, on average, $4,955 of the premium tab.
While outstripping inflation, the growth in premiums is moderate by the standards of health care. Still, there’s growing concern that bigger deductibles mean more people with coverage can’t afford to get sick.
“The 4 percent increase we’re reporting for 2015 — it continues a remarkable 10-year run of moderate increases in premiums and health costs generally,” said Drew Altman, president of the Kaiser Family Foundation, during a confence call with reporters. “But it’s also a health cost slowdown which has been, I would say, all but invisible to consumers.”
Deductibles are an amount that health insurance enrollees must pay before most health care services are covered as part of an employer-sponsored plan.
Data analyzed by the Minnesota Department of Health suggest that about 95 percent of Minnesota private-sector workers with coverage through an employer had a deductible last year, up from 53 percent in 2002, said Stefan Gildemeister, the state health economist with the health department.
The study released Tuesday found that the growth rate for deductibles is about four times as fast as that for wages and inflation.
Concern about the impact of deductibles is growing.
“People who have high deductibles, or high out-of-pocket costs relative to their income, are much more likely to report not getting needed health care,” said Sara Collins, a researcher with the New York-based Commonwealth Fund, a health policy group.
Minnesota’s health insurance exchange, MNsure, this fall plans to roll out new online tools to help consumers better see the trade-off between low premiums and high deductibles.
The Kaiser survey’s national findings about moderate growth in premiums, and faster growth in deductibles, match what’s happening in the Twin Cities, said Bob Seng, a partner in the benefits and compensation group at Dorsey & Whitney LLP.
Most companies have a sense for how they think health plan costs should be split between the employer and employees, Seng said. As costs go up, “employers only have so many levers to move enough responsibility to employees to preserve the ratio,” he said.
More employer plans could be boosting deductibles further in the future, Altman said, because of a looming tax that’s part of the federal Affordable Care Act.
Beginning in 2018, employer health plans will be subject to an excise tax of 40 percent on the amount by which their costs exceed specified thresholds — $10,200 for single coverage and $27,000 for family coverage. Often referred to as the “Cadillac tax,” the measure worries employers.
In the Kaiser survey, 19 percent of firms said their largest health plans are on pace to exceed the 2018 threshold. One way to stay below it is to boost cost-sharing, which isn’t part of the calculation for the tax.
“There could be a further spurt in deductibles if the Cadillac tax goes into effect,” Altman said.
The report released Tuesday was the 17th annual survey by the Kaiser Foundation, which is a health policy group, and the Health Reserach & Educational Trust, which is an affiliate of the American Hospital Association. To track coverage trends, it drew on survey responses from nearly 2,000 small and large employers on a variety of topics.
The survey found wellness programs remain popular in employer health plans. About half of large employers offering health screening programs that include questionaries on employee lifestyle, stress or physical health, and 31 percent of firms offer financial incentives for employees to complete them.
“I think it’s all very positive news, especially as we speak to health as a priority in addition to health care,” said Maulik Joshi, president of the Health Research & Educational Trust.
The survey also found scant evidence to back up concerns that the federal health law would either prompt employers to drop their health plans, or push more workers to part-time status where they don’t qualify for benefits.
Fifty-seven percent of employers are offering health benefits to at least some employees, which is statistically unchanged from 2014.
Among employers surveyed with 50 or more full-time workers, 4 percent said they changed some job classifications to part-time so employees would not be eligible for health benefits, while 10 percent reported changing some job classifications to full-time so workers could get coverage.
“It’s muted. It’s modest,” Altman said of the health law impacts. “It cuts in different directions, with no big shift to part-time employment.”