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Workers' health insurance premiums rise modestly, but deductibles jump lot more

Healthcare
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You might not have seen a big difference in your health insurance premiums this year.

But when you went to the doctor, the hospital or got a blood test, it might have cost noticeably more.

The average insurance premiums for a family covered by job-based health plans rose just 3 percent in 2016, continuing a significant slowdown in the cost of such coverage, according to a new survey released Wednesday. About 150 million people are covered by employer-based plans, the biggest source of health coverage in the United States.

But the average deductible for such plans rose by 12 percent, according to the Kaiser Family Foundation/Health Research & Educational Trust survey. A deductible is the amount of money a patient must spend out of pocket for most health services before their insurance plan starts covering their costs.

In 2016, the average deductible for workers was $1,478, up from $1,318 last year, the survey found. And for the first time, according to the survey, slightly more than half of all covered workers have deductibles of at least $1,000, and at smaller firms, the average deductibles are now above $2,000.

The survey also found that the Affordable Care Act, known as Obamacare, is having no effect at driving up employer health insurance costs, and that few companies are changing their employees' hours as a result of ACA requirements.

In fact, more employers reported being more likely to increase their workers hours, to make them eligible for health insurance, as opposed to cutting hours to avoid being obligated by the ACA to cover them, according to the survey.

Seven percent of companies with 50 or more full-time workers, who by law are obligated to offer them health plans, said they had shifted or planned to shift workers from part time to full time to make them eligible for coverage, the survey found. But just 2 percent said they shifted or planned to shift workers from full time to part time to avoid having to offer them coverage.

Drew Altman, president and CEO of the Kaiser Family Foundation, said a key takeaway of the survey is that "premium growth remains strikingly low."

But this slowdown, Altman noted, is in large part a result of workers having to directly pay more for individual medical services than they have in the past, in the form of deductibles, copays and coinsurance. Companies are increasingly turning to high-deductible plans as a way to hold down premium increases.

Since 2011, employer-based premiums — which include both what an employer pays toward premiums and the workers' share of those — have grown 20 percent. However, in the five years before that, 2006 to 2011, premium growth was 31 percent, and the rate was more than twice that from 2001 to 2006.

That said, this year, "deductibles are rising much faster than premiums, almost six times faster than wages," said Altman.

At the same time, the number of workers covered by high-deductible plans with a tax-advantaged savings option, which have deductibles of $1,000 or more annually for an individual and at least $2,000 for family coverage, have grown sharply in recent years.

A total of 29 percent of all workers in 2016 have such a plans, which allow them to use health savings accounts and other tax-advantage vehicles to pay for their health services. That compares to 20 percent in 2014, according to the survey.

Altman said that those statistics reveal "a shift in what insurance is for most Americans, from what is comprehensive [coverage] to what is skimpier coverage, with more skin in the game" for workers.

"I think it's the biggest change in health care that we currently aren't debating, and it may be more important than the ACA in terms of the number of people affected," Altman said. Just 11 million or so people were enrolled in Obamacare individual health plans sold on government exchanges as of earlier this year.

Altman said that despite heated arguments over Obamacare, there is no evidence that the health-care reform law is pushing up premiums in the employer-based insurance market.

"It clearly has not driven up employer health costs because they could not really be expected to grow much slower than they are," Altman said, referring to the 3 percent rise in premiums for such plans this year.

In 2016, the average annual premiums for job-based health insurance were $6,435 for a worker in single coverage. For a family, the average premiums were $18,142.

"On average, workers contributed 18 percent of the premium for single coverage, and 30 percent for family coverage," said an article in the journal Health Affairs about the survey's findings.

In dollar terms, that translates into average contributions by a worker of $1,129 for coverage only for themselves, and $5,277 in average contributions by the worker for coverage that includes their family as well.