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High-deductible premiums rising, too

September 17, 2012

The cheaper premiums for high-deductible health plans continue to boost their popularity among American employers and workers, but the growth of the plans’ costs are no different than that of other products.

High-deductible health plans, which are typically paired with a tax-free health reimbursement or health savings account, enrolled 19 percent of all covered workers this year, according to the Kaiser Family Foundation’s annual survey of employer health benefits.

That is up from 17 percent last year and from just 4 percent in 2006.

The reason for the plans’ appeal is not a secret: Average premiums for a high-deductible plan this year were $14,129 for family coverage—a savings of more than $2,200, or 14 percent, compared with the average cost of family coverage in a PPO plan.

Each insured worker sees about $700 of those savings—although the higher deductibles on the plans leave employees exposed to more out-of-pocket spending. Employers reap savings of more than $1,500, but many contribute to workers’ health spending accounts.

The average premiums for all plans this year were $15,745 for family coverage, an increase of 4.5 percent over last year.

Premiums for family coverage in a high-deductible health plan rose only 3.1 percent this year, but it was the first time since 2007 that premiums for the plans grew slower than health plans overall.

Since 2007, premiums for high-deductible health plans’ family coverage has grown a cumulative 32 percent, compared with 30 percent among all health plans.

If there’s a silver lining, it may be that high-deductible health plans are having at least a modest slowing effect on Americans’ use of health care services. Use of health care has been down during the recession and recovery of the last four years—even slower than can be credited to the recession alone.

“Health care use and the economy have always been closely tied, and my sense is that the recession and slow recovery are responsible for much of the recent health spending and premium trends. Increases in recent years in cost sharing through high-deductible plans have probably played a supporting role,” wrote Drew Altman, president of the Kaiser Family Foundation, in a blog post.

“In tough times, when wages are flat, people avoid using the health care system if they can,” he added. “We also know that higher out-of-pocket costs deter utilization, so it’s reasonable to assume that the growth of high-deductible plans and other forms of cost sharing has had an impact on health care use, magnifying the effect of the economy.”

 

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