iLoveBenefits: Industry News Blog

Patient spending increases as costs are shifted to deductibles and coinsurance

According to a recent blog in the Wall Street Journal by Kaiser Family Foundation’s Drew Altman, while worker’s wages increased 32% from 2004 to 2014, here’s what happend to patient spending during that time period:

  • patient spending on deductibles increased 256%
  • patient spending on coinsurance increased 107%
  • patient spending on copays decreased 26%

Source: “The Next Big Debate in Health Care,” The Wall Street Journal/Think Tank, June 30, 2016,

How has your health insurance deductible changed?

The average deductible among workers enrolled in a single coverage health plan with a deductible has risen:

  • For all firms, from $584 in 2006 to $1217 in 2014
  • For small firms (between 3 and 199 workers), from $496 in 2006 to $971 in 2014
  • For large firms (at least 200 workers), from $775 in 2006 to $1797 in 2014

Source: “Recent Trends in Employer-Sponsored Insurance,” figures, The Journal of the American Medical Association (JAMA), November 12, 2014,

When you have seen one Silver Plan, you’ve seen one Silver Plan

Robert Wood Johnson Foundation released a report entitled Take Two Aspirin: An Examination of Physician Visit Cost Sharing and Benefit Design in the New Health Insurance Marketplaces.  The report, based on Breakaway Policy Strategies data, examined the 1,208 silver plans in all 50 states and D.C. and found that cost-sharing for silver plans varies widely.  Co-payments for primary care physician visits can cost anywhere from $0 to $75 and from $10 to $150 for specialist visits.  Co-insurance rates for primary care visits can range from 0% to 50% and from 8% to 100% for specialist visits.

2015 HDHP limits and 401(k) catch up contributions

The IRS released Revenue Procedure 2014-30 announcing the 2015 minimum deductible and maximum out-of-pocket limits for HSA-qualified high deductible health plans (HDHPs) and the maximum contribution levels for health savings accounts (HSAs).

The IRS adjusted the 2014 figures for inflation.

Effective for calendar year 2015:

  • The minimum annual deductible for an HSA-qualified HDHP plan will be $1,300 for self-only coverage and $2,600 for family coverage;
  • The maximum annual out-of-pocket limits allowable under an HDHP will be $6,450 for self-only coverage and $12,900 for family coverage; and
  • The maximum allowable annual contribution employees may make to their HSAs will be $3,350 for an individual with self-only coverage or $6,650 for an individual with family coverage.

The limit on catch-up contributions, allowed for those with HSAs who are age 55 and older, remains at an additional $1,000 per year.

For plan years beginning on or after January 1, 2014 (or upon loss of grandfathered status, if later), the Affordable Care Act ties annual plan out-of-pocket maximums (coinsurance, deductibles, copayments, and similar charges) for all types of plans (including plans that are not HSA-qualified HDHPs) to the above out-of-pocket limits.

You may access a copy of the Revenue Procedure at:

Health care costs continue to rise

According to a recent analysis:

  • The average health care cost per employee was $10,131 in 2012; $10,471 in 2013; and is projected to rise to $11,176 in 2014
  • The portion of the total health care premium that employees were asked to contribute was $2,200 in 2012; $2,303 in 2013; and is projected at $2,499 for 2014
  • Average employee out-of-pocket costs–including copayments, coinsurance and deductibles–averaged $1,984 in 2012; $2,239 in 2013; and are expected to rise to $2,470 in 2014
  • Employees’ share of health care costs—including employee contributions and out-of-pocket costs—will have risen from $2,011 in 2004 to $4,969 in 2014

Source: “Aon Hewitt Analysis Shows Lowest U.S. Health Care Cost Increases in More Than a Decade,” Aon Hewitt Press Release, October 17, 2013,

Cost of health care and use of services

According to a recent study, in 2012:

  • The number of patient visits to doctors’ offices fell 0.9%
  • Emergency room admissions increased by 5.8%
  • Average out-of-pocket costs for commercially insured, under age 65 patients reached $1,146, a 30% increase from 2011 and entirely the result of higher deductibles
  • Just 5% of the commercially insured, under age 65 patients incurred 51% of total healthcare costs by using more than $15,684 of healthcare services per person

Source: “IMS Health Study Points to a Declining Cost Curve for U.S. Medicines in 2012,” IMS Institute for Healthcare Informatics Press Release, May 9 2013,

Employer Health Insurance Premiums Rose 62%, Deductibles More Than Doubled Across States from 2003 to 2011

Average premiums for employer-sponsored family health insurance plans rose 62 percent between 2003 and 2011, rising far faster than incomes did in all states, according to a new Commonwealth Fund analysis that tracks trends in job-based coverage state by state.

The study also finds that annual costs for the share of insurance premiums paid by workers grew an average of 74 percent, and deductibles more than doubled during the period. Total health insurance premiums now amount to 20 percent or more of annual median family incomes in 35 states, affecting 80 percent of the U.S. working-age population.

“Wherever you live in the United States, health insurance is expensive,” says Commonwealth Fund senior vice president Cathy Schoen, the study’s lead author. “And for many middle- as well as low-income families, it is becoming ever less affordable.” The state trends over the past decade, she says, underscore the need to build on the groundwork laid by the Affordable Care Act to slow growth in private insurance costs.

companion analysis describes trends in employer-sponsored health insurance premiums and worker contributions in 41 major metropolitan areas, while infographics show how growth in insurance costs is straining family and employer budgets in New York, Texas, and across the country.

Cost of care is rising

Patients are paying more for the care they receive. The increase is in terms of premiums and the amount they pay for each service. How long will it be before consumers demand complete price transparency in health care?

According to a recent survey of American workers, respondents said that over the last 3 years, their employers had:

  • significantly increased the amount employees pay when they use health care services – 31%
  • significantly increased the amount employees pay each month in premiums for health care coverage – 29%
  • adopted a high-deductible health care plan – 29%

Source: “American Workers Seek More Security in Retirement and Health Plans,” Towers Watson, February 2012,

Get a basic understanding of health insurance terms – it is elementary

Facilitating State Health Exchange Communication Through the Use of Health Literate Practices – Workshop Summary

Deductible, co-insurance, out-of-pocket limits. Even to those with a basic understanding of health insurance, terms like these can be difficult to explain and understand. Under the Affordable Care Act of 2010, many more Americans will be eligible for health insurance through state insurance exchanges by 2014. Many of these individuals are among the 90 million American adults who lack basic health literacy. The IOM held a workshop that focused on ways in which health literate communication techniques can help improve communication to potential enrollees.

Read the Report >>

High deductibles will have unintended consequences that plan designers need to consider

As high deductible plans grow in market share, so too, is the pain going to grow for many sectors. With high deductibles more people will forego care, more people will be delinquent on their payments. Whether foregoing care will have an overall health status impact is a hotly debated topic. Delinquency in payments is appearing across America as doctors and hospital’s Days Sales Outstanding (DSO) is on the rise.

One solution, is to publish real prices for services and episodes. That way people can budget for their health care expenses rather than being surprised by the bill that arrives weeks and months later. Another approach is for employers to shun the traditional high deductible construct and transform the deductible into a percent of pay value – so that the more you earn the higher your deductible, but where everyone pays, for example 1% of their pay in the form of a deductible.

Survey: Most employees still have traditional health plans
Most employees continue to have coverage under traditional health insurance plans, although high-deductible and consumer-driven plans are on the rise, according to the Employee Benefit Research Institute. A report from the organization showed that 78% of employees had traditional plans this year, while high-deductible-plan participants increased by 2 percentage points to 16%. Consumer-driven plans were also up 2 percentage points. The Kansas City Star (Mo.) (12/23)

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