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High-Deductible Health Plan Trends

By August 28, 2018Commentary

High-deductible plans are well-established in the private insurance market, but their growth may be plateauing, partly due to uncertainty about their total impact on health spending and on consumer well-being, since they can create financial stresses.  A study in Health Affairs identifies trends in high-deductible plan use, using MEPS data from 2006 and 2016.   (HA Article)   Many of these plans are paired with a savings account of some type, to which employers often contribute as well as workers.  Those savings accounts can ease the pain of the high-deductible and other cost-sharing.  In 2006 only 11% of employees were covered by a high-deductible plan.  By 2016 this had risen to 46.5%.  The plans were adopted most frequently in the early years by small companies, with the share of covered employees declining as firm size increased.  By 2016, even at the largest employers (with 1000 or more employees), the percent of workers in such a plan was 42%.  Those businesses with 25-99 employees had the greatest share of covered workers, 56%.  In 2016, 23.4% of all employees were in a high-deductible plan that included some form of savings account to which the employer contributed, so about half of all the workers covered by such plans had access to such an account.  The percent was lowest in small firms and rose steadily as company size increased and the availability of these accounts increased from 2006 to 2016.

In general, over the study period more employees were only offered health coverage options that included high deductibles, but in some company size groups, the number of HDPD options increased.  Employees in small firms were most likely to be fully subject to high-deductibles, that is to have only an HDPD available for health benefits and to have no savings account to which an employer contributed.  Two-thirds of workers in small companies were in this situation in both 2006 and 2016.  Average deductibles in these plan designs in 2016 were $2480 for single and $4721 for family.  Deductibles were highest in small companies and lowest in the largest ones.  Interestingly, large companies with employer-funded savings accounts tended to have lower deductibles, which is a double benefit for employees.  But these larger companies are likely also more profitable and have better and more stable cash flows.  Enrollees in HDPDs with an employer-funded savings account also tended to have fewer provider access restrictions.  Greater choice of providers also increased with company size.  Overall, it is clear that a lot of employees are bearing much of their health care costs without any contribution from the employer.  That may explain why health spending continues to be a potent political issue.

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