Average deductibles for employer-sponsored plans tripled between 2008 and 2018. This increase likely has led to a low utilization trend because employees are delaying or forgoing care due to their deductible. Employees often don’t understand their financial exposure with high deductible plans.
Employees may be skipping preventive care because of cost concerns, when in reality, the visit would be covered at no cost to them. Meanwhile, they may be surprised to return for a sick visit to the same doctor who provides their preventive care only to walk away with a bill. The difference between a preventive visit and any other visit is not one that consumers can easily discern themselves based on their interactions with the doctor, but it is one that can have major cost implications for the consumer, especially those on a high deductible health plan (HDHP).
Collectively, higher deductibles and lack of clarity around financial exposure based on the type of visit has led to frustration. Forty-two percent of consumers surveyed by HRI with an employer-based HDHP said they were dissatisfied with their deductible.
Employees’ disappointment with HDHPs may be driven less by what they are actually spending on healthcare and more by what they are at risk for spending and might be unable to afford. Twenty-eight percent of consumers surveyed by HRI with an HDHP through their employer said it would be hard to afford the deductible. In this survey, HRI found one-third or more of individuals and families with employer-based insurance and an HDHP don’t have enough saved to pay for their deductible.
This frustration also may come from the fact that growth in employee cost sharing has outpaced growth in wages in recent years. An HRI analysis of Truven Health Analytics MarketScan Commercial Claims and Encounters summary data reported by the Kaiser Family Foundation found that cost sharing grew at an average annual rate of 4.5 percent from 2006 to 2016 while annual median wages grew at an average rate of 1.8 percent over the same time period.
Interestingly, the share of total healthcare costs being paid by employees enrolled in an employer-sponsored health plan has remained relatively steady, around 15 percent of total healthcare costs, including medical and drug costs, from 2006 to 2016, according to the HRI analysis of the Truven data reported by the Kaiser Family Foundation. This may be because in spite of large deductibles, the dollar amount of out-of-pocket spending on healthcare costs under a qualifying HDHP offered by employers is capped by the IRS each year. Additionally, deductibles do not apply to certain preventive services—those costs are absorbed by the employer.