Deductibles Have Risen 6 Times Faster Than Wages Since 2010

Despite the reported slowdown in healthcare spending, consumers are unlikely to have noticed such a change because of the sharp increase in deductibles.

The 17th annual Kaiser Family Foundation (KFF)/Health Research & Education Trust (HRET) 2015 Employer Health Benefits Survey found that there have been large increases with deductibles. Not only has the share of workers with deductibles increased sharply since 2010, but so have the size of deductibles. This combination has resulted in a 67% increase in deductibles since 2010, which is 6 times more than the rise in workers’ wages (10%) and general inflation (9%).

“With deductibles rising so much faster than premiums and wages, it's no surprise that consumers have not felt the slowdown in health spending,” KFF President and CEO Drew Altman said in a statement.

Currently 81% of workers are in plans with a general annual deductible. Workers at smaller firms face average deductibles of $1836, which is 66% more than the $1105 average paid by workers in large firms.

Meanwhile, premiums continued to grow moderately, rising an average of 4% this year, compared with an average growth of 5% each year since 2005 and 11% annually between 1999 and 2005.

“Employees are benefiting from stable employer health benefits coverage and modest premium growth,” said Maulik Joshi, president of HRET, an affiliate of the American Hospital Association. "Also noteworthy is that many employers are tying financial incentives to employee participation in health and wellness programs.”

Workers at large firms in general are faced with different experiences for employer-sponsored health. Many large employers (200 or more workers) offer health screening programs, including health risk assessments, and biometric screenings and the employers are offering a financial incentive to complete these screenings. Plus, 38% of employers offering a wellness program, such as smoking cessation, weight loss, or other lifestyle coaching, provide a financial incentive for employes to participate or complete the program.

In addition, the survey found large employers are taking steps to prepare for the Affordable Care Act's excise tax on high-cost health plans. The so-called Cadillac tax will begin in 2018 and 13% of firms say they have made changes to avoid reaching the tax threshold and 8% said they switched to a lower-cost health plan.

"Those changes likely will shift costs to workers, but exactly how and how much will vary for individual workers," said study lead author Gary Claxton, KFF vice president and director of the Health Care Marketplace Project.