The rise in health insurance deductibles and coinsurance payments has garnered a lot of attention from the public.
In just under a decade, the average deductible for employer-based health coverage soared from $303 to $1,077, according to a report from The Henry J. Kaiser Family Foundation.
Analyzing such drastic increases leads many to conclude that a large number of employees may never be able to afford their deductibles, not to mention the copayments or coinsurance often stacked on top.
In order to grasp a sense of the health care burden cast onto employees, The Kaiser Family Foundation analyzed a sample of health benefit claims from the Truven MarketScan Commercial Claims and Encounters Database to determine the average amount enrollees paid in deductibles and coinsurance.
“We find that, between 2004 and 2014, average payments for deductibles and coinsurance rose considerably faster than the overall cost for covered benefits, while the average payments for copayments fell,” according to the report.
Between 2004 and 2014, the average amount enrollees paid towards deductibles increased by 256 percent, from $99 to $353. Similarly, the average coinsurance payment increased by 107 percent, from $117 to $242, while average copays shrunk by 26 percent, from $206 to $152.
In total, the enrollee’s burden increased by 77 percent, from an average of $422 in 2004 to $747 in 2014. In that same timeframe, the average payments by health plans rose 58 percent, from $2,748 to $4,354.
“This reflects a modest decline in the average generosity of insurance -- large employer plans covered 86.7 percent of covered medical expenses on average in 2004, decreasing to 85.3 percent in 2014,” according to the report.
Meanwhile, worker’s wages increased by 32 percent, according to the report.
The top 15 percent of health spenders, who accounted for 74.8 percent of the sample, paid significantly more in out-of-pocket costs and averaged $2,679 in 2014. This amount included $1,249 in coinsurance payments, $928 in deductibles and $502 in copays.
The increase in cost-sharing for the top health spenders mirrored the pattern in the overall sample. By 2014, 5.5 percent of all enrollees had deductible payments greater than $1,500, and 7.8 percent had overall cost-sharing payments that exceeded $2,500.
In 2014, deductibles accounted for 24 percent of cost-sharing payments. In 2014, the percentage grew to 47. Copayments, on the other hand, accounted for almost half of cost-sharing payments in 2004, but fell to 20 percent in 2014.
“The increase in coinsurance over the period may reflect the strong growth over the period in plans that qualify a person to establish a health savings account; these plans are more likely to have coinsurance than copayments for physician services,” according to the report.
The report also pointed out that patients tend to be more concerned about “the actual price of health care with deductibles and coinsurance than they are with copays, which are flat dollar amounts.”
A key difference between copays and deductibles is that copays may add up over time, which often turns out to be more affordable for enrollees compared to deductibles -- which often need to be paid all at once.
“While average payments towards deductibles are still relatively low in the context of total household budgets, they have increased quite rapidly,” according to the report. “Deductibles are the most visible element of an insurance plan to patients, which may help explain why consumers are showing concern about their out-of-pocket costs for care.”
Even though the findings show that health insurance providers continue to pay a large portion of the cost of benefits, employees enrolled in large employer plans are paying a greater share of their medical expenses out of pocket.
“While health care spending has been growing at fairly modest rates in recent years, the growth in out-of-pocket costs comes at a time when wages have been largely stagnant,” the report concluded.
The sample used for the study consisted of 785,000 to 15.3 million enrollees per year between 2004 and 2014. Only enrollees with more than six months of coverage during each year were selected for the study.
