Kaiser study finds employee health insurance deductibles rise 4.5 percent

  • The new Kaiser Family Foundation survey of health benefits finds that average deductibles for workers in employer health plans rose 4.5 percent this year to $1,573.
  • More large companies are trying to rein in costs by rewarding workers who take steps to get healthier.
Open enrollment is under way

While wages for many may finally be edging higher, health costs are growing a whole lot faster.

As 2019 open enrollment season begins, most workers who have employer health plans will see moderate increases in premiums and deductibles, but it may not feel like they're getting much of a bargain.

"Deductibles went up again this year, … and what we've seen with worker contributions is in line with the trend we've seen the past couple of years," said Matthew Rae, co-senior researcher at the Kaiser Family Foundation.

The average deductible for a worker in an employer health plan this year is $1,573, up 4.5 percent from $1,505 in 2017, according to the Kaiser Family Foundation employer health benefits survey. Benefits analysts say they expect increases to be modest again for 2019.

But the longer-term trend tells a bigger story of why even small increases make workers feel like they're losing the battle on out-of-pocket health costs. While deductibles have more than doubled from 2008 to 2018, wages have only risen 26 percent over that period.

"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, said Kim Buckey, vice president of client services at health benefits firm DirectPath.

Incentives to rein in costs

More large companies are trying to rein in overall costs by rewarding workers who take steps to get healthier. According to the Kaiser survey, nearly 40 percent of large employers provided cash incentives of up to $500 this year for employees who completed health screening and health risk assessment programs.

Employers are also trying to coax workers to make their health-care dollars go further by offering wider coverage for less-expensive options like retail clinics and telemedicine visits where doctors diagnose and treat patients remotely over video, online or by phone.

Three-quarters of large employers now pay for telemedicine visits with doctors over the phone or video chat, up from just 27 percent in 2015. While worker adoption is rising, Kaiser researchers found telemedicine visits still make up less than 1 percent of employee interactions with doctors.

"Employers are willing to pay for (telemedicine) but as of yet, it hasn't adapted into employees' lives," said Rae.

Next year, watch for employers to make a bigger push to integrate telemedicine more fully into benefit options.

"They are stepping up communication around telemedicine, … using real life examples of employees who've used the service, to encourage participation," DirectPath's Buckey said.

Cost-shifting, more benefit limits

For many employers, benefit changes have replaced outright cost-shifting as the main lever to control costs.

Benefit analysts say for 2019, workers can expect to see more restrictive brand-name drug coverage on their pharmacy benefit plans and a bigger push to get their prescriptions from less-expensive mail order pharmacies.

When it comes to medical plans, some firms are embracing more options with narrow networks.

"I had one client (that's) no longer covering out-of-network care, unless it's an emergency or it's a surprise situation," Buckey said.

One trend employers will be watching in 2019 is how many workers decide to opt out of health benefits altogether. The GOP tax plan repealed the Affordable Care Act penalty for people who don't have coverage. One in 4 large employers expects they'll see a drop in employee enrollment next year.