Health benefit costs up
Growth in health insurance premiums for employer-sponsored plans was tame this year but there's a trade-off: Workers are paying more out-of-pocket for medical care.
The average premium for a family was $16,834 this year, up 3 percent compared with last year, according to a major survey of company health benefits by the Kaiser Family Foundation.
Companies are relying increasingly on plans that carry a higher deductible as a strategy for controlling premium costs, according to Kaiser, a Menlo Park, Calif.-based nonpartisan, nonprofit health research organization.
“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,” Kaiser CEO Drew Altman said.
The deductible is the money patients must pay a doctor or hospital before their insurance kicks in. It can help lower health care costs by discouraging people from needlessly seeking treatment.
But bigger up-front costs can lead to higher expenses down the road if people forego medical care they really need because they either can't afford it or don't want to spend the money.
“Obviously, it's a concern,” said Antoinette Kraus, director of the Pennsylvania Health Access Network. “When there are increased costs, whether it's through higher premiums or higher deductibles, that can serve as a barrier to people being able to access health care.”
The average deductible for single workers was $1,217 this year, up 7 percent from last year and 47 percent since 2009, Kaiser found. And the percentage of workers with a deductible of $2,000 or more rose to 18 percent, up from 15 percent.
Kaiser's survey is the latest study to show growth in health costs are moderating.
A Centers for Medicare & Medicaid Services study released last week estimated the nation's total health care bill grew 3.6 percent last year, tied with the lowest annual increase on record.
It also found that higher deductibles were contributing to lower spending, along with slower economic growth.
Higher deductibles are favored by employers because they are a way to pass price increases along to workers, and because they're seen as a way to spur workers to be more conscious of the cost of medical services.
Workers are also paying more in premiums. They contributed on average 29 percent, or $4,823, toward a family premium this year, up 6 percent from last year, Kaiser found.
“The total cost of health care is increasing exponentially and employers are leveraging strategies to manage these costs,” including shifting costs to employees through higher deductibles, co-payments, premium contributions and co-insurance, said Jessica Brooks, executive director of the Pittsburgh Business Group on Health.
The nonprofit group, which represents more than 90 large employers in western Pennsylvania, recently found an average deductible for single workers among its members of $501 this year, up from $458 last year.
Joseph Angelelli, a health economist and Robert Morris University assistant professor, said the best studies on how patients react to large deductibles are a few years old, but clearly showed that people skip preventive care, such as cancer screenings and immunizations, when faced with large out-of-pocket costs.
“These high deductible plans, what we know so far, is that in the early years people were cutting back on preventive services,” he said. “They're spending less on health care but it could show up down the road.”
That behavior may change as patients become accustomed to how the plans work and how to comparison shop for better prices, he said.
“The comparison tools have gotten better,” he said. “Folks have much more information at their fingertips to be better consumers. ... Ideally over time consumers will get better at it.”
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or email@example.com.