- The cost of important elements of health insurance, such as deductibles and spending limits, has risen at a more moderate pace in recent years.
- For example, the average deductible has risen by 10.3% over the past five years. This is a significant drop from growth of 38.6% over 2013-2018 and 54.4% between 2008 and 2013, according to data from KFF, a nonprofit healthcare data provider.
- Workers can potentially save money by ensuring they choose the plan best suited to their situation.
The costs of some of the main components of health insurance have fallen for workers in recent years. While this slowdown is a positive trend, many workers probably feel that current prices are still unaffordable, experts say.
“Yes, there has been a slowdown,” said Carolyn McClanahan, physician and certified financial planner, founder of Life Planning Partners in Jacksonville, Fla. “But it’s already glaringly obvious to the average person.
Employer-sponsored health plans have many moving parts that can affect workers’ pocketbooks. For example, premiums are deducted from every paycheck. A visit to the doctor is often accompanied by a co-payment in the form of a co-payment, a deductible and a spending limit.
The increase in employee contributions has been somewhat mitigated.
According to KFF, a nonprofit healthcare data provider, workers will pay $1,401 in total premiums in 2023, an 18% increase over 2018. They rose by an equivalent amount between 2013 and 2018, but increased by 39% between 2008 and 2013.
The dynamic is more pronounced for deductibles and ceilings.
A deductible is the annual amount a consumer must pay out-of-pocket before a health insurer starts paying for services.
According to KFF, single workers will face an average deductible of $1,735 in 2023 (this cost is for employer-sponsored health plans and assumes consumers receive in-network care).
The average deductible has risen by 10.3% over the past five years, from $1,573 in 2018. However, this rate has fallen considerably compared with the recent past: Deductibles rose by 38.6% from 2013 to 2018 and by 54.4% from 2008 to 2013, for example, according to KFF data.
Prior to 2018, deductibles were “taking off,” said Matthew Rae, associate director of KFF’s Healthcare Market Program and co-author of its annual Health Benefits Survey.
How out-of-pocket maximums have changed
The same dynamic applies to out-of-pocket limits, i.e. the annual limit on a worker’s cost-sharing during the year. Once this ceiling has been reached, insurers can no longer demand co-payments, co-insurance or deductibles, for example.
The out-of-pocket cap is “what really matters to high-spenders” when it comes to health care, Rae said.
By 2023, 13% of single workers will have an out-of-pocket cap of less than $2,000, while 21% will have a cap of more than $6,000, according to KFF. This situation has hardly changed over the past five years.
However, the dynamics have changed significantly over the previous five years. In 2013, 29% of workers had a spending cap of less than $2,000, while only 4% had a cap of $6,000 or more, according to KFF. In other words, the proportion with a relatively low ceiling halved between 2013 and 2018, while the proportion with a high ceiling increased fivefold.
After years in which caps and deductibles rose rapidly, “that’s no longer the case,” Rae said.
The reduced growth in workers’ comp cost-sharing requirements is largely attributable to the strength of the labor market in recent years, Rae said. This has led employers to make their health plans more competitive in order to attract and retain employees. But it’s hard to know how long this strength will last; in fact, it has slowed in recent months.
However, consumers shouldn’t necessarily “throw up their hands and rejoice”, added Rae. Families with multiple dependents trying to meet an annual deductible could be enough to put middle-class families into debt, he said.
Strong labor market is a big factor
According to KFF, one in four employers say they are very concerned about the affordability of cost-sharing in their health plans.
And well the sharing of costs decreased, insurances can adjust certain aspects of health plans that make relatively less interesting for consumers – in reducing the list of suppliers in the network of a plan, example, declared M. McClanahan, member of the board of administration CNBC.
How to keep costs down
Choosing the most economical health insurance usually means choosing “just the right amount,” says McClanahan.
In other words, insurance that offers comprehensive coverage but high monthly premiums may not be the best option for someone who doesn’t need frequent medical care.
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For example, an HMO plan is generally better suited to consumers who don’t have major health problems and rarely go to the doctor. She recommends finding a good primary care physician and asking which network the doctor is included in HMO plans so you can consult the doctor of your choice.
Of course, most employees only have a few options during the open enrollment period, so there’s not much they can do on an individual level, McClanahan said. However, at the family level, there may be other variables: if both spouses work, the most efficient option may be to choose a plan for the whole family, or to put the spouse and children on one plan and the remaining spouse on another, she said.