Deductibles Hit $2,000 As Employers Intensify Cost Shift

“Annual deductibles for Americans with employer-based health coverage are hurtling toward $2,000 on average, according to new studies analyzing employee medical benefits.”

Bruce Japsen

HealthcareI write about healthcare business and policy

Annual deductibles for Americans with employer-based health coverage are hurtling toward $2,000 on average, according to new studies analyzing employee medical benefits.

As workers peruse their health benefit packages during this fall’s open enrollment, it’s likely they’ll be enrolled in a plan with a higher deductible than last year. Such rising out-of-pocket costs continue to    become a sizable chunk of annual income if they use their employee-sponsored medical benefits.

The average annual deductible for single coverage increased nearly 7% to $1,808 in 2017, according to a new analysis from the Robert Wood Johnson Foundation-funded University of Minnesota State Health Access Data Assistance Center, which uses data from the Medical Expenditure Panel Survey . “Nearly half of workers enrolled in employer-sponsored insurance plans (48.7%) had a deductible at or above $1,300 for an individual or $2,600 for a family,” the analysis.

“Deductibles are rising every year, although the rate of increase seems to have slowed down a tad this year (6.6% versus about 10%) as compared with the year before, as employers approach the limits of what they think employees can tolerate,” says the Robert Wood Johnson Foundation’s Katherine Hempstead, a senior policy advisor who directs the organization’s work on health insurance coverage.

And this week’s annual Kaiser Family Foundation report confirmed the rising trend, showing the average single deductible this year is $1,573 for employees for the 85% of employees who have a deductible as part of their coverage. But those deductibles are rising with 26% of all workers in plans with “a deductible of at least $2,000,” Kaiser ‘s report said. “Deductibles of $2,000 or more are increasingly common in employer plans, which means the bills can pile up quickly for workers who require significant medical care,” the study’s lead author, Gary Claxton, a Kaiser Family Foundation vice president said.

The trend of high deductibles shows little sign of subsiding, analysts of employee benefits say. Benefits consultancy, Mercer, for example said the average “in-network” individual deductible was $1,917 for workers in preferred provider organization (PPO) plans in 2017 for employers with 10 to 499 employees, according to its 2017 benefits report, which indicated such deductibles “have risen faster than overall medical plan cost growth.”

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