Why a Growing Number of Employees are Choosing High-deductible Healthcare Plans

By pokitdok,

In 2006, 10% of employees chose high-deductible health care plans (plans with a deductible of $1,000 or more), as reported by the Kaiser Family Foundation. By 2012, that number had jumped to a whopping 34% and it continues to grow.

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But it’s not just the percentage of employees choosing HIGH-deductible plans that has gone up, it’s also the percentage of employees that have chosen plans with deductibles of ANY size. In 2006, 52% of employees chose to go with deductible plans, versus 72% in 2012. Never mind the average cost of the deductibles themselves, also steadily rising from $584 to $1,097 respectively.

Why the shift? It’s twofold. Employees are looking to save money by lowering their monthly premium, and more employers are making these plans available. In fact, 12% of employers offer only high-deductible plans. Deductibles for these plans have increased 82%, going from $1,785 in 2006, to $2,086 in 2012. Counter to this, the percentage of employees that enroll in plans that don’t require a deductible (such as HMOs) has decreased from 20% to 16%.

Is any of this related to the size of a company? Yes, and no. While the out-of-pocket costs for employees at small companies (3-199 employees) are much higher than they are for employees at large companies (200+ employees), the growth in the percentage of people that choose deductible plans is about the same. In 2006, 35% of employees at small companies, compared to 28% at large companies chose deductible plans. In 2012 that number jumped to 58% and 63% respectively. However, the out-of-pocket difference is much greater.

In 2006, the average employee that chose a deductible plan at a small company paid $775 in out-of-pocket expenses, as compared to $496 for employees at large companies. In 2012, that number jumped to $1,596, and $875 respectively, almost double.

Surprisingly enough, it’s employees that work at smaller companies that are more likely to choose high deductible plans (plans with a deductible of $1,000 or more). As of 2012, 49% of employees at small companies chose high deductible plans, versus 26% at large companies. The discrepancy is also wide for those that chose deductibles of $2,000 or more. As of 2012, 27% of employees at small firms versus 7% at large firms chose these plans. Some of the discrepancy can be attributed to smaller firms simply offering higher deductible plans. The remaining discrepancy is likely because smaller companies cannot afford to cover a portion of employee's monthly premiums, forcing them to select the lower cost, "catastrophic" plans to minimize their monthly out-of-pocket costs.

So what does this mean for you? Ask yourself these questions: Can you afford the high deductible? What kinds of services do you typically use in a given calendar year? Will the high deductible force you to skimp on your health care, ultimately costing you more in the long term? Will you avoid the ER, forgo an MRI, or skip out on a recommended hospital stay if your deductible is too high? Or, does your deductible fit within your budget and decrease your annual healthcare costs?

Do your research, and be sure to weigh the costs along with the quality of care when searching for the plan that’s right for you. A great resource is Stridehealth.com or coveredca.com for California residents.

The opinions expressed in this blog are of the authors and not of PokitDok's. The posts on this blog are for information only, and are not intended to substitute for a doctor-patient or other healthcare professional-patient relationship nor do they constitute medical or healthcare advice.

  Tags: API, Dev, Healthcare consumerism