Employer health insurance, which covers half of Americans, is held up to be the gold standard of coverage. But even those with job-based plans can face big bills for doctors’ visits and drugs, two new studies have found.
Workers and their families who sought care shelled out an average of nearly $1,200 in out-of-pocket costs in 2017, according to a report published Tuesday by the Health Care Cost Institute. This spending, which includes deductibles, copays and co-insurance, is up nearly 15% from five years earlier.
Health care spending continues to grow faster than inflation and the economy as a whole. But the increase is fueled mainly by higher prices rather than more usage, said Niall Brennan, the institute’s CEO. And those in employer-based plans are not immune.
“Working Americans and their families are using the same of fewer health care services, yet the costs of those services keep increasing,” Brennan said.
Total spending for those with job-based coverage rose to an all-time high of $5,641, on average, per person in 2017, though the rate of growth slowed a bit. This includes payments by employers and insurance companies.
Employees are now on the hook for such large bills that a swiftly growing share are not considered fully insured.
About 28% of adults with health insurance through their employer were underinsured in 2018, up from 20% just four years earlier and from 10% in 2003, according to a study released last week by the Commonwealth Fund, a health care think tank.
Americans are considered underinsured if their deductibles are at least 5% of their household income or if their annual out-of-pocket costs, excluding premiums, are at least 10% of their household income, according to the Commonwealth Fund. Lower-income people are underinsured if either their deductibles or their out-of-pocket costs exceed 5% of their income.
Soaring deductibles have been a sore spot among many Americans for years. Though the big deductibles in many Affordable Care Act plans have attracted a lot of attention, employers have also been raising deductibles recently. In fact, the greatest growth in the underinsured comes among those in employer plans.
Companies have opted to increase deductibles and copays to try to keep premium growth in check, though both numbers have been rising faster than wages and inflation in recent years.
The average deductible stood at $1,350 in 2018, up 212% since 2008, according to the Kaiser Family Foundation’s Employer Health Benefits Survey. That’s eight times faster than wage growth.
One bright spot: Employers are now curbing the growth rate of deductibles.
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“They’ve reached a limit in the amount of costs they can share with their employees in order to keep their premiums down,” said Sara Collins, the Commonwealth Fund study’s lead author.
Being underinsured can carry big health risks, as it can prompt people to skip needed care or can leave patients with hefty bills.
About 23% of underinsured adults skipped a recommended test, treatment or followup in the previous year, compared with 10% of those with better coverage, according to the Commonwealth Fund. And 30% of the underinsured said they had problems paying medical bills, compared with 13% of the fully insured.