News 10/9/2018

Leader-Telegram: Study Details Rising Cost of Deductibles

A report released Wednesday has amplified a topic already at the forefront of concerns for many Americans: health care.

The Kaiser Family Foundation, a nonprofit organization focused on health issues, made available its 2018 Employer Health Benefits Survey. It found that the average annual family premiums for employer-sponsored health insurance grew 5 percent to $19,616. Workers on average are responsible for $5,547 of that bill, with employers making up the difference. Family premiums have risen 55 percent since 2008, compared to 26 percent and 17 percent bumps, respectively, in wages and inflation.

The study found that the number of workers with a deductible of at least $2,000 rose to 26 percent. It’s 42 percent for workers at firms with fewer than 200 workers.

“Deductibles of $2,000 or more are increasingly common in employer plans, which means the bills can pile up quickly for workers who require significant medical care,” said Gary Claxton, a KFF vice president, in a news release.

An increase in out-of-pocket costs for workers is particularly worrisome in a climate of relatively stagnant wages.

“Deductibles are rising every year, although the rate of increase seems to have slowed down a tad this year (6.6 percent versus about 10 percent) as compared with the year before, as employers approach the limits of what they think employees can tolerate,” Katherine Hempstead told Forbes magazine. Hempstead is a policy advisor for the Robert Wood Johnson Foundation, which funds the University of Minnesota State Health Access Data Assistance Center.

Advancements in telemedicine and wellness programs can trim costs for employers. Hopefully, other strategies will be added to the mix to taper the steady rise in average deductibles.

“Employers are very conscious of that … (and) seem to realize that they’re at the end of their limits of cost-shifting in the realm of deductibles,” so they’re making other changes, Kim Buckey, vice president of client services at health benefits firm DirectPath, told CNBC.

Added Matthew Rae, Kaiser health policy analyst in an Associated Press story: “At some point (deductibles) have to come down to Earth, we just don’t know what point that is.”

Warren Buffett has described health care as “the tape worm of the American economy.” Expenses for workers may get the most press, but soaring costs have a decided impact on employers as well. As such, look for health care to once again dominate policy debates in the upcoming midterm elections.

“Health costs don’t rise in a vacuum,” Drew Altman, KFF president and CEO said in the release. “As long as out-of-pocket costs for deductibles, drugs, surprise bills and more continue to outpace wage growth, people will be frustrated by their medical bills and see health costs as huge pocketbook and political issues.”

Read the article here.

(Liam Marlaire is the assistant editor)


How to Protect Yourself from Surprise Medical Bills
How to Protect Yourself from Surprise Medical Bills
Download eBook