Employer-Sponsored Healthcare Deductibles Surge 400% In Past Decade; 13x More Than Wages

Tyler Durden's picture

We spend fair amount of time discussing the soaring costs of Obamacare, but, as the Kaiser Family Foundation points out in a new study, employer sponsored plans, while not as bad as Obamacare, are also gradually pushing more healthcare costs onto their employees through surging deductibles and co-insurance payments all while wages remain fairly stagnant.

As Kaiser notes, the average deductible for an employer sponsored plan increased 400% between 2006 and 2017, actual deductible payments covered by employees increased 229% and co-insurance payments rose 89% all while wages only rose 31%.

Rising cost-sharing for people with health insurance has drawn a good deal of public attention in recent years.  For example, the average deductible for people with employer-provided health coverage rose from $303 to $1,505 between 2006 and 2017.

 

While we can get a sense of employees’ potential exposure to out-of-pocket costs by looking at trends in deductibles, many employees will never reach their deductibles and other employees may have costs that far exceed their deductibles.  In addition to deductible payments, some employees also have copayments (set dollar amounts for a given service) or coinsurance payments (a percentage of the allowed amount for the service).  To look at what workers and their families actually spend out-of-pocket for services covered by their employer-sponsored plan, we analyzed a sample of health benefit claims from the Truven MarketScan Commercial Claims and Encounters Database to calculate the average amounts paid toward deductibles, copayments and coinsurance.

 

We find that, between 2005 and 2015, average payments for deductibles and coinsurance rose considerably faster than the overall cost for covered benefits, while the average payments for copayments fell.  As can be seen in the chart below, over this time period, patient cost-sharing rose substantially faster than payments for care by health plans as insurance coverage became a little less generous.

 

From 2005 to 2015, the average payments by enrollees towards deductibles rose 229% from $117 to $386, and the average payments towards coinsurance rose 89%, from $134 to $253, while average payments for copays fell by 36%, from $218 to $139.  Overall, patient cost-sharing rose by 66%, from an average of $469 in 2005 to $778 in 2015. During that period, average payments by health plans rose 56%, from $2,932 to $4,563. This reflects a modest decline in the average generosity of insurance – large employer plans covered 86.2% of covered medical expenses on average in 2005, decreasing to 85.4% in 2015.  Wages, meanwhile, rose by 31% from 2005 to 2015.

Adding it all up, that means employees are paying roughly 65% more out-of-pocket for their healthcare than they were a decade ago.

That said, we're sure employers will undoubtedly focus on declining co-payments when pitching healthcare plans to potential employees while ignoring overall out-of-pocket expenses...and it probably works...at least in the short-term.

The relatively high growth in payments toward deductibles is evident in the changes over time in the distribution of cost sharing payments: deductibles accounted for 25% of cost sharing payments in 2005, rising to 50% in 2015.  Conversely, copayments accounted for nearly half (46%) of cost sharing payments in 2005, falling to 18% in 2015.  The increase in coinsurance over the period from 29% of total employee cost-sharing in 2005 to 33% in 2015 may reflect the strong growth over the period in plans that qualify a person to establish a health savings account; these plans are more likely to have coinsurance than copayments for physician services.  Patients are more sensitive to the actual price of health care with deductibles and coinsurance than they are with copays, which are flat dollar amounts.  The other difference between a copay and a deductible is that copays may add up over time, while a deductible may need to be met at once, causing affordability challenges.

Of course, as our readers are undoubtedly aware, a mere 65% increase in total out-of-pocket costs over 10 years would be music to the ears of those among us forced to purchase private insurance through Obamacare exchanges.

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shankster's picture

Obama is not a rocket scientist and he is not an MD but he sure is piss-poor at math.

SmackDaddy's picture

My grandparents have been retired longer than I've been alive

auricle's picture

It's for the boomers. 

EDIT: and the gimmedats. Got to keep the sheep docile until the looting is complete.

BandGap's picture

So they didn't factor your birth into their decision? Good for them.

SmackDaddy's picture

I worry about the country I'll be leaving my grandchildren every single day. Nearly every single waking hour. sometimes I have nightmares about it.

I get sick to my stomach just talking about it.

"We must secure the existence of our people and a future for white children."

A Sentinel's picture

I have the feeling that I will have to move my family elsewhere sooner than I thought. I'm not ready yet, looks like I have less time every day.

HRH Feant2's picture

Same here. Moving is expensive and a lot of work. Stressful.

Saw a nigger with two kids wearing a beekeeper suit last week.

Too many of them. I am looking to go mobile and live in an RV for a year or two. I hope to find a nice place where I can settle down and buy a nice cabin or house and live a nice, quiet life. Accepting donations. BTC address in my personal info.

Stuck on Zero's picture

My "Cadillac" health plan has $9700 deductible for a single person and $25,000 deductible for the whole family. My employer pays $12,000 for the plan. There's also a knock-down drag out fight over every tiny expense that passes through the system. We often get a $500 bill for a blood test that we submit to the health plan. They knock it down to $90 and we pay that. What a stupid fucked up mess.

WallHoo's picture

A Blood test(simple) costs like 10 euros and i pay 1 or 2 euros...

 

I have a friend of mine in the US with scholarship(master and phd on math).He says that US health bureucracy sucks,doctors dont know which insurance goes to what medicine.He once got some hemroids on his ass.Doctor said pills(800 dollars) or cream (10 dollars).Im sorry to say it but you guys are getting fucked in the ass because youre gorvement tryies to appease everyone...

Sidenote,my friend left a left wing/liberal and became a conservative in the US with all the disguasting things he saw...

 

Also you people are correct,universities in your country are what you call liberal shitholes,he is telling me every time.You also get fucked education-wise,the US spends tons of money for foreign student scholarships and those dump fuck chinese and indians who get them are as ungreatfull and liberal as you can think... My friend is the only european btw.

Sofa King's picture

That's fucking hysterical.

I think of my grandmother, God rest her soul. My grandparents lived in the States for 10 years during which my Grandfather was gainfully employed. They went back to the home land where, while my Granfather passed only a few years into collecting his SS, my grandmother lived another 35 years and collected every month. I will love them forever...but holy shit, that's one hell of a payout. I like to think that, while I won't see a dime of my SS, I was able to a least take care of them and my parents through my labors.

Unsustainable.

SmackDaddy's picture

Yeah it's tough. I know a lot of people who labored their whole lives literally doing back breaking work who really deserve to be taken care of in their old age. Just doing their best, not asking for much, but actually creating value in society.

And then my mind wonders off to their childless faggot peers who were tenured professors spewing anti-white Marxist bullshit for the last 30 years who now live a perpetual vacation on the taxpayers dime..

covfefe MICdotard's picture

Thankfully, Nancy Pelosi signed it before she saw what was in it & is now faced with the same hardships...

 

Oh Wait!

j0nx's picture

Wages rose 31% in the past decade? News to me. Mine rose by about 10-15% at most and that is probably generous. My healthcare, food and other expenses are up HUGELY though.

Bigly's picture

I saw that and laughed too. They mean public sector, unions....

The go-go time for me was 1995-2000. I over doubled my salary and started getting stock options. 2000-2008 +35% 2008-2017 stayed level give or take 5%. None of this factors inflation.

You make decent $, you have a target on your back for layoffs too. You need to factor in the drain of expenses every month. Since 2008 i noticed the money was not going much beyond 3 levels down from c-levels

One step forward, two back in the last 10 years.

847328_3527's picture

Middle class has been destroyed for a number of reasons including Obamacare and the transfer of millions of good paying jobs overseas or south of the border.

Plus, Obama's energy plan has devastated that sector and many oil and gas companies went bankrupt laying off hundreds of thousands of STEM engineers. I read somewhere that Houston alone lost over 86,000 engineers and their median salary had been $185k/year. That's alot of direct as well as trickle down destruction.

Wait until reports come out for the retail sector. It will be more of a bloodbath then previously predicted.

If the Democrats + left wing Repugnicans like McShame. Corker, Graham, etc keep blocking Obamacare fixes, job creation, tax cuts, etc, it will get much much worse.

America's hayday is most certianly over, but still not as bad as some 3rd world countries.

One thing for sure, I'll NEVER vote Democrat again.

junction's picture

Obamacare provides high deductible, narrow network health insurance plans that would be a total rip-off if not for the government subsidies to those qualified to receive these subsidies.  Bad as these Obummer plans are, there is one other factor that makes these plans bad.  These plans pay so little to medical care providers that they encourage doctors to dump patients with these crummy paying plans and they encourage hospitals to do the minimal possible to treat seriously ill patients.  In other words, the hospital "death panels," the administrators who make the decision on how much expensive medical treatment the hospital provides, profile patients with Obummercare as potential money pits.  Increasing the chance that the patient leaves under a blanket on a covered gurney pushed by two men dressed in black going to the hospital mortuary.

navy62802's picture

That's why we got Common Core Math under his presidency.

Blue Steel 309's picture

This has nothing to do with government intervention in healthcare including medicare and medicaid.

Look people kneeling during sportsball!

BandGap's picture

Sometimes I get a woody for no reason at all.

nmewn's picture

Me too.

Thanks Obama! ;-)

Pausebreak's picture

Me too thanks to Medicare Part D funding of my Androgel.

Stan522's picture

I pay out of pocket for a family of 4 over  $2,400 per month. It's O-care for my wife and me and my two college boys are getting health care coverage from their university.

 

My house payment is less. If I need to visit the doctor, co-pays, and deductibles become outrageous.

 

Even with this the tax system does not warrant a tax break for all my expenses. It's fucked up and the only way I see a fix is if there is a law that states whatever law that exists or will pass congress has to live under it too....

BandGap's picture

I have six kids, five covered by insurance. With my wife, that's seven people. Your one month payment is more than our deductible.

Unbelieveable.

Fuck the brown clown.

HulkHogan's picture

I feel your pain. Got the same issue here.

Rentier88's picture

I would dump that O-care crap and get just major medical plan with high deductable and pay everything else out of pocket.

Stan522's picture

Already penciled that one out. I have an insulin dependent diabetic in the family and we can't get away with that plan without paying through the nose for diabetic supplies and doctors visits.

 

 

Rentier88's picture

Ah yeah that sucks then...sorry hear that.

Bigly's picture

Two more years of this and employers will start pulling offering medical insurance.

Even making 6 figure salaries is not enough to shield from this huge money suck of contribution/premiums the high deductibles and reduced coinsurance % or tweaking plan limits, etc.

Protip: the most impt # is out of pocket calendar max. When you get to that insurance pays 100%. Beware going out of network tho as the doc can balance bill you for specific services. Go in network.

Rentier88's picture

My family plan deductable is still only $500 a year and is still 80/20 until hit the $500 vs. being all $500 front loaded.  Which is expensive vs. what it was 5 years ago, but way cheaper than other people I know paying upwards of $6800 deductable and is all front loaded.  Monthly premuim is $320 per month for family plan and is not HMO can go see whoever we want.  Two things to note, one my company is foreign based and two they are self-insured. 

Bigly's picture

Still, you must live in a low cost area of the country as no way the premium is that low in metro areas.

Nevertheless, i would love to see your plan design. You rates are so 10 years ago. I wonder what they are doing. Does your co. have over 10k employees?

Rentier88's picture

Florida...yes not in lame metro area either...7,600+ employees.

Rentier88's picture

No, but others on my team are in Miami and have the same rate.  Think big pharma...Cigna manages the plan for them too.

Bigly's picture

They have some economies of scale with that #.  In addition, you must have a younger demographic in general. Other than pregnancy and the odd issue your claims might not be too bad as a group. If they were they are subsidizing a lot of the hurt, essentially buffering you from the hideous experience we are all having and paying a greater amt so you do not have to do so. Keep the 4 leaf clover on that one......

Rentier88's picture

One thing I think they do when hiring is they disqualify anyone with "lifestyle" generated health issues to keep cost down. Morons are quickly fired too, get 2 traffic tickets in one calendar year and you are fired, DUI you are fired on the spot.  If you are viewed as a risk they don't want you.  Most co-workers are in 30 to 50ish age range all high maintenance when comes to fitness for most part.  One thing they won't pay for is stupid billing, like trying to get blood work done at say a hospital setting when you can have it done at a lab facility.

 

"They have some economies of scale with that #."

 

Is hard to say, have relative that works for lockheed martin which is very large company and next year they are getting thrown totally under the bus on their healthcare coverage...

All costs you bear yourself till you hit the specified amount, the minimum of which is $3200/family in network.  In-network and out of network are not combined.  And if you really get sick, you could be out a minimum of $10,900 depending on plan you enrolled in ($40,000 if you pick the cheapest plan).

khakuda's picture

Yup.  No inflation here, move along.

No inflation in housing, rents, tuition, stock prices or bond prices either.  None.  Zip.  Nada.

FU CBs.

ClickNLook's picture

Am I only one who thinks it is more hospitals and pharma than insurance who caused this.

If Trump would get rid of Congress lobbying as he promised, this whole problem would eventually go away.

shankster's picture

just disband Congress altogether..problem solved.

Kokulakai's picture

Disband?

Trials and prison for the lot of them.

CultiVader's picture

The numbers look about right. We do everything we can to stay away from the hospital, yet pay 20% of our income for insurance.

youngman's picture

Its dumping a new huge social program on the middle class...that is what it is....the givemedats now have better insurance than you do..and get put in the front of the line

Cluster_Frak's picture

modern slavery: a peon cannot switch jobs, because of insurance.

WorkingClassMan's picture

Thats why we need Medicare for all...basic, catastrophic coverage until 65 (or about when normal Medicare would kick in).

How will it be paid? 

  1. Tax businesses a portion of what they pay now in insurance for employees
  2. Tax individuals a portion of their pay to cover basic coverage
  3. Disallowing illegal alien invaders the opportunity to abuse our system.  If they're in thr country illegally, they get no coverage.
  4. Making criminals pay for their own gunshot wound repairs--if they can't pay, they die.
  5. Tort reform to protect against the ambulance chasers.
  6. Allow for additional, superior coverage to be purchased on the market.
  7. Force political whores to endure the exact same coverage we peons suffer through--regardless of what that coverage ends up being.

And the slavery part is very real...my friend is experiencing this now because he has had the temerity to have heart issues (he's Italian).  He can't leave a job and be without insurance coverage (can't afford cobra) for 3-6 months.

Cut the employer out of the healthcare situation...they'll be happy and us employees will be happy.  For once a win-win for all.

Pickleton's picture

"Medicare for all."  

"For once a win-win for all."

 

Looks like despite your little avatar pic, you're a commie symp and an imbecile.

 

I recommend letting you people, that always insist that you're one breath away from death and it's all the GOPs fault, die in the fucking street.   What better way to educate people on ignorance than seeing idiots stacked like cordwood.

Now THAT is win-win.

MuffDiver69's picture

Look at these mega hospitals and what's behind the curtains..We all know it..The associations of Hospitals,doctors,medical schools and Big Pharma are one big happy family bribing Congress like no other- except maybe the Cheap Labor of Congress..

Pausebreak's picture

They reward the big admitters by putting them on medical committees that pay several thousand a month for their participation.