The Missing Debate Over Rising Health-Care Deductibles
For 18 years, the Kaiser Family Foundation and the Health Research and Educational Trust have done an annual survey of employer health benefits. This year it found that deductibles rose 12% in 2016 in the group market and four times faster than premiums increased. For context, 150 million Americans get coverage through their employers. The trend toward higher deductibles is especially pronounced among employers with fewer than 200 workers, where 65% of employees are now in high-deductible plans. The average deductible in these firms is $2,000.
Rising deductibles, coupled with the slow economic recovery from the Great Recession, has depressed utilization of health services and helped to keep premium increases lower than they would otherwise be. High-deductible plans are cheaper: Family coverage in a typical high-deductible plan with a savings option runs $16,737, compared with $19,003 for a PPO plan for a family. Enrollment in high-deductible plans with savings accounts reduced the average premium increase for all employers by half a percentage point in 2014 and 2015.
Some people who have high-deductible plans with savings accounts receive employer contributions to their accounts that can offset some of their out-of-pocket costs. The ACA caps annual total out-of-pocket costs in the group as well as non-group market for most plans at $6,850 per year for individual coverage and $13,700 for family coverage, eliminating additional out-of-pocket costs for in network services.
The presidential candidates diverge sharply on deductibles. Hillary Clinton has proposed a tax credit to help people with very high out-of-pocket costs pay their health-care bills. Donald Trump has supported expanding high-deductible plans with savings accounts. Early on, the next president will face choices on health care, including whether to focus on ACA fixes or on consumer pocketbook issues. The latter, such as rising deductibles and drug prices, generally resonate more strongly with the public. Whatever the new Congress does, one of, if not the most, pressing question in health care is shaping up as: How much cost-sharing is too much and for whom?