September 10, 2014 -- An authoritative annual survey of employer-sponsored health insurance says premiums for family coverage rose only 3 percent this year but that workers are getting socked by rising deductibles.
On average employees must pay $1,217 this year before their health costs are covered. That's up 47 percent since 2009, when deductibles averaged $826.
Eighty percent of workers now pay a deductible, according to the survey by the Kaiser Family Foundation and the Health Research and Educational Trust.
The survey of some 2,000 small and large employers also found that the requirements in the health care law (PL 111-148, PL 111-152) for more generous benefits are reaching more and more workers.
"The relatively slow growth in premiums this year is good news for employers and workers, though many workers now pay more when they get sick as deductibles continue to rise and skin-in-the-game insurance gradually becomes the norm," said Kaiser Family Foundation CEO Drew Altman.
"Today, four in 10 covered workers face at least a $1,000 deductible, nearly double the share from just five years ago," said the lead author of the survey, Gary Claxton, a Kaiser vice president who directs the foundation's health care marketplace research.
Almost one in five covered workers now faces an annual deductible of at least $2,000. Writing big checks for health care expenses is particularly a facet of coverage in the small employer market.
At employers with three to 199 workers, 61 percent pay at least $1,000 in deductibles and 34 percent pay at least $2,000 in deductibles. The average deductible is $1,800.
Health experts on both sides of the aisle can point to findings in the survey to validate their policy prescriptions.
Republicans in particular have pushed the idea that individuals would shop more carefully if they had to pay more of their own money before health coverage kicks in.
A system in which high deductibles are the norm would see slower spending growth and competition that slows medical inflation, they argue.
"These findings are positive and reflect a general slowing in health care costs overall," said Maulik Joshi, president of the Health Research and Educational Trust, a research arm of the American Hospital Association.
Premium growth has moderated considerably, increasing a total of 26 percent over the past five years compared to 34 percent in the five-year period before that. Premiums were growing at a double-digit clip in the late 1990s and early 2000s, researchers noted.
They added that the 3 percent increase this year is similar to the year to year rise in workers' wages of 2.3 percent and general inflation of 2 percent.
But employer sponsored family coverage, typically paid for mostly by the company but with employees kicking in a lot too, is very expensive. Premiums averaged $16,834 in 2014 with workers paying $4,823.
Annual premiums for worker-only coverage averaged $6,024 in 2014 with workers paying $1,081.
One of the goals of the health care overhaul was to require that certain preventive benefits be covered by employers with no cost-sharing and instituting an external appeals process for workers.
Two years ago, 48 percent of covered workers weren't seeing these improvements because their plans had grandfathered status under the health law. But plans lose that status if employers change them substantially. More and more are becoming subject to the coverage requirements of the law.
The survey found that 36 percent of covered workers were in grandfathered plans last year and that this year, the percentage fell further to 26 percent. The overhaul also has forced shorter waiting periods before new workers start getting their health benefits. The average length in 2014 is 2.1 months, down from 2.3 months in 2013.
Altman says the consensus among experts is that the overall slowdown in costs partly stems from a sluggish economy holding down the use of health care, and partly from changes in insurance and health care delivery. There is "no agreement on how much of the slowdown is due to one or the other of those factors, and no one knows for sure if or when costs will begin to escalate more rapidly again," he said in a briefing on the results. That is "equally true for what will be happening to employer premiums in the future as well."
