2018 Employer Health Benefits Survey

GENERAL ANNUAL DEDUCTIBLES FOR WORKERS IN PLANS WITH DEDUCTIBLES

• A general annual deductible is an amount that must be paid by enrollees before most services are covered by their health plan. Non-grandfathered health plans are required to cover some services, such as preventive care, without cost sharing. Some plans require enrollees to meet a service-specific deductible, such as for prescription drugs or hospital admissions, in lieu of or in addition to a general annual deductible.
  • Eighty-five percent of covered workers are enrolled in a plan with a general annual deductible for single coverage, higher than the percentage last year (81%) and much higher than the percentage ten years ago (59%) [Figure 7.2].
  • The percentage of covered workers enrolled in a plan with a general annual deductible for single coverage is the same for small firms (3-199 workers) and large firms (200 or more workers) (85%) [Figure 7.2].
  • The likelihood of having a deductible varies by plan type [Figure 7.1]. Covered workers in HMOs are less likely to have a general annual deductible for single coverage than workers in other plan types. Forty-six percent of workers in HMOs do not have a general annual deductible for single coverage, compared to 24% of workers in POS plans and 12% of workers in PPOs.
• For covered workers in a plan with a general annual deductible, the average annual deductible for single coverage is $1,573, similar to the average deductible last year ($1,505) [Figures 7.3 and 7.10].
  • For covered workers in plans with a general annual deductible, the average deductibles for single coverage are $870 in HMOs, $1,204 in PPOs, $1,598 in POS plans, and $2,349 in HDHP/SOs [Figure 7.6].
  • The average deductibles for single coverage are higher across plan types for covered workers in small firms than for covered workers in large firms. For covered workers in PPOs with a general annual deductible, for example, the average deductible for single coverage in small firms is considerably higher than the average deductible in large firms ($1,784 vs. $1,012) [Figure 7.6]. Overall, for covered workers in plans with a general annual deductible, the average deductible for single coverage in small firms ($2,132) is higher than the average deductible in large firms ($1,355) [Figure 7.3].
  • The average general annual deductible for single coverage for covered workers in plans with a deductible has increased 39% over the past five years, from $1,135 in 2013 to $1,573 in 2018 [Figure 7.9].

GENERAL ANNUAL DEDUCTIBLES AMONG ALL COVERED WORKERS

• As discussed above, the share of covered workers in plans with a general annual deductible has increased significantly over time: from 59% in 2008, to 78% in 2013, to 85% in 2018 [Figure 7.2]. The average deductibles for covered workers in plans with a deductible have also increased: from $735 in 2008, to $1,135 in 2013, to $1,573 in 2018 [Figure 7.10]. Neither trend by itself, however, captures the full impact of changes in deductibles on covered workers. We can look at the average impact of both trends together on covered workers by assigning a zero deductible value to covered workers in plans with no deductible and looking at how the resulting averages change over time. These average deductible amounts are lower in any given year but the changes over time reflect both the higher deductibles in plans with a deductible and the fact that more workers face them.
  • Using this approach, the average general annual deductible for single coverage for all covered workers in 2018 is $1,350, higher than the general annual deductible last year ($1,221) [Figure 7.10].
  • The 2018 value is 53% higher than the average general annual deductible of $883 in 2013 and 212% higher than the average general annual deductible of $433 in 2008 [Figure 7.10].
• Another way to look at deductibles is the percentage of all covered workers who are in a plan with a deductible that exceeds certain thresholds. Fifty-eight percent of covered workers are in plans with a general annual deductible of $1,000 or more for single coverage, higher than the percentage last year [Figure 7.13].
  • Over the past five years, the percentage of covered workers with a general annual deductible of $1,000 or more for single coverage has grown 54%, from 38% to 58% [Figure 7.13].
  • Workers in small firms are considerably more likely to have a general annual deductible of $1,000 or more for single coverage than workers in large firms (68% vs. 54%) [Figure 7.12].
  • In 2018, over a quarter (26%) of covered workers are enrolled in a plan with a deductible of $2,000 or more, higher than the percentage last year (22%) [Figure 7.15]. This percentage is much higher for covered workers in small firms (42% vs. 20%) [Figure 7.12].

GENERAL ANNUAL DEDUCTIBLES AND ACCOUNT CONTRIBUTIONS

• One of the reasons for the growth in deductibles has been the growth in enrollment in HDHP/SOs, which have higher deductibles than other plans. While growing deductibles in other plan types generally increases enrollee out-of-pocket liability, the shift in enrollment to HDHP/SOs does not necessarily do so because many HDHP/SO enrollees receive an account contribution from their employers, which in essence reduces the high cost sharing in these plans.
  • Eight percent of covered workers in an HDHP with an HRA and 2% of covered workers in an HSA-qualified HDHP receive an account contribution for single coverage at least equal to their deductible, while another 37% of covered workers in an HDHP with an HRA and 26% of covered workers in an HSA-qualified HDHP receive account contributions that, if applied to their deductible, would reduce the deductible to $1,000 or less [Figure 7.17].
  • If we reduce the deductibles by employer account contributions, the percentage of covered workers with a deductible of $1,000 or more would be reduced from 58% to 48% [Figures 7.13 and 7.14].

GENERAL ANNUAL DEDUCTIBLES FOR WORKERS ENROLLED IN FAMILY COVERGE

Family deductibles are structured in two ways: (1) with an aggregate family deductible, the out-of-pocket expenses of all family members count against a specified family deductible amount, and the deductible is considered met when the combined family expenses exceeds the deductible amount; (2) with a separate per-person family deductible, each family member is subject to a specified deductible amount before the plan covers expenses for that member, although many plans consider the deductible for all family members met once a specified number (typically two or three) of family members meet their specified deductible.²¹

• In most plan types, relatively few covered workers are in plans without a general annual deductible for family coverage: 12% of covered workers in PPOs, and 24% of covered workers in POS plans. As defined, all covered workers in HDHP/SOs have a general annual deductible for family coverage [Figure 7.21].
• Among covered workers enrolled in family coverage, the percentages of covered workers in a plan with an aggregate general annual deductible are 25% for workers in HMOs; 53% for workers in PPOs; 65% for workers in POS plans; and 75% for workers in HDHP/SOs [Figure 7.21].
  • The average deductible amounts for covered workers in plans with an aggregate annual deductible for family coverage are $2,317 for HMOs; $3,000 for PPOs; $3,497 for POS plans; and $4,676 for HDHP/SOs [Figure 7.22]. Deductible amounts for aggregate family deductibles are similar to last year for plan types other than PPOs.
• For covered workers in plans with an aggregate deductible for family coverage, the average annual family deductibles in small firms are higher than the average annual family deductibles in large firms for covered workers in HMOs, PPOs, and HDHP/SOs [Figure 7.22].
• Among covered workers enrolled in family coverage, the percentages of covered workers in plans with a separate per-person annual deductible for family coverage are 30% for workers in HMOs; 35% for workers in PPOs; 11% for workers in POS plans; and 25% for workers in HDHP/SOs [Figure 7.21].
  • The average deductible amounts for covered workers in plans with separate per-person annual deductibles for family coverage are $691 for HMOs; $1,005 for PPOs; $1,864 for POS plans; and $2,560 for HDHP/SOs [Figure 7.22].
  • Most covered workers in plans with a separate per-person annual deductible for family coverage have a limit for the number of family members required to meet the separate deductible amounts [Figure 7.25]. Among those covered workers in plans with a limit on the number of family members, the most frequent number of family members required to meet the separate per-person deductible is two [Figure 7.26].

CHARACTERISTICS OF GENERAL ANNUAL DEDUCTIBLES

• The majority of covered workers with a general annual deductible are in plans where the deductible does not have to be met before certain services, such as physician office visits or prescription drugs, are covered.
  • Large majorities of covered workers (80% in HMOs, 75% in PPOs, 74% in POS plans, and 44% in HDHP/HRAs) that are enrolled in plans with general annual deductibles are in plans where the deductible does not have to be met before physician office visits for primary care are covered [Figure 7.28].
  • Similarly, among workers with a general annual deductible, large shares of covered workers in HMOs (95%), PPOs (92%), POS plans (91%), and HDHP/HRAs (83%) are enrolled in plans where the general annual deductible does not have to be met before prescription drugs are covered [Figure 7.28].

HOSPITAL ADMISSIONS AND OUTPATIENT SURGERY

• Whether or not a worker has a general annual deductible, most workers face additional types of cost sharing (such as a copayment, coinsurance, or a per diem charge) when admitted to a hospital or having outpatient surgery. The distribution of workers with cost sharing for hospital admissions or outpatient surgery does not equal 100%, as workers may face a complex combination of types of cost sharing. For this reason, the average copayment and coinsurance rates include workers who may have a combination of these types of cost sharing.
• Beginning in 2017, to reduce the burden on respondents, we revised the survey to ask about cost sharing for hospital admissions and outpatient surgery only for their largest health plan type; previously, we asked for this information for each of the plan types that they offered.
• For hospital admissions, 68% of covered workers have coinsurance and 11% have a copayment. Lower percentages of workers have per day (per diem) payments (5%), a separate hospital deductible (1%), or both a copayment and coinsurance (9%), while 16% have no additional cost sharing for hospital admissions after any general annual deductible has been met [Figure 7.29].
  • For covered workers in HMO, copayments are more common (38%) and coinsurance (24%) is less common than the average for all covered workers [Figures 7.29 and 7.31].
  • HDHP/SOs, on average, have a different cost-sharing structure than other plan types for hospital admissions. Only 2% of covered workers in HDHP/SOs have a copayment for hospital admissions, lower than the average for all covered workers [Figure 7.29].
  • The average coinsurance rate for a hospital admission is 19%, the average copayment is $284 per hospital admission, and the average per diem charge is $327 [Figure 7.32]. Ninety-two percent of workers enrolled in a plan with a per diem for hospital admissions have a limit on the number of days a worker must pay the amount [Figure 7.33].
• The cost-sharing provisions for outpatient surgery are similar to those for hospital admissions, as most workers have coinsurance or copayments. In 2018, 14% of covered workers have a copayment and 69% have coinsurance for outpatient surgery. In addition, 5% have both a copayment and coinsurance, while 16% have no additional cost sharing after any general annual deductible has been met [Figures 7.30 and 7.31].
  • For covered workers with cost sharing for outpatient surgery, the average coinsurance rate is 19% and the average copayment is $151 [Figure 7.32].

COST SHARING FOR PHYSICIAN OFFICE VISITS

• The majority of covered workers are enrolled in health plans that require cost sharing for an in-network physician office visit, in addition to any general annual deductible.²²
  • The most common form of physician office visit cost sharing for in-network services is a copayment. Sixty-six percent of covered workers have a copayment for a primary care physician office visit and 24% have coinsurance. For office visits with a specialty physician, 64% of covered workers have a copayment and 27% have coinsurance [Figure 7.36].
  • Over the past five years, the percentage of covered workers with coinsurance for office visits with a specialist has risen from 20% to 27%.
  • Covered workers in HMOs, PPOs, and POS plans are much more likely to have copayments for both primary care and specialty care physician office visits than workers in HDHP/SOs. For primary care physician office visits, 62% of covered workers in HDHP/SOs have coinsurance, 20% have no cost sharing after the general annual plan deductible is met, and 16% have a copayment [Figure 7.36].
  • Among covered workers with a copayment for in-network physician office visits, the average copayment is $25 for primary care and $40 for specialty physician office visits [Figure 7.37], similar to the amounts last year.
  • Among covered workers with coinsurance for in-network physician office visits, the average coinsurance rates are 18% for a visit with a primary care physician and 18% for a visit with a specialist [Figure 7.37], similar to the rates last year.

OUT-OF-POCKET MAXIMUMS

• Most covered workers are in a plan that partially or totally limits the cost sharing that an enrollee must pay in a year. This limit is generally referred to as an out-of-pocket maximum. The Affordable Care Act (ACA) requires that non-grandfathered health plans have an out-of-pocket maximum of no more than $7,350 for single coverage and $14,700 for family coverage in 2018.²³ Many plans have complex out-of-pocket structures, which makes it difficult to accurately collect information on this element of plan design.
• In 2018, 99% of covered workers are in a plan with an out-of-pocket maximum for single coverage. This is a significant increase from 88% in 2013 [Figure 7.43].
• For covered workers in plans with an out-of-pocket maximum for single coverage, there is wide variation in spending limits.
  • Fourteen percent of covered workers in plans with an out-of-pocket maximum for single coverage have an out-of-pocket maximum of less than $2,000, while 20% have an out-of-pocket maximum of $6,000 or more [Figure 7.45].