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Report shines a harsh light on the cost of high-deductible plans to consumers

Premiums for employer-sponsored insurance plans over the last 10 years rose 55 percent, twice as fast as workers' earnings.

Workers with employer-sponsored health insurance are struggling like never before to meet their deductibles, pay their premiums and fund the cost of their healthcare.

So says a report by nonprofit Kaiser Family Foundation, which partnered with The Los Angeles Times on the survey.  The report shines a harsh light on the "cost-sharing revolution" of the past few decades that has spurred high-deductible plans and higher out-of-pocket costs for employees.

Premiums for employer-sponsored insurance plans between 2008 and 2018 increased 55 percent--twice as fast as workers' earnings, the report said. And since 2006, the average health insurance deductible for covered workers soared by more than 200 percent--from an inflation-adjusted average of $379 percent to more than $1,300 today.

As a result, many Americans with job-based insurance are feeling financially strained and are taking drastic steps to make due.

The report found that:

  • 25 percent of workers say they or an immediate family member struggled to pay their medical bills before meeting their deductible over the last year.
  • 26 percent say they cut back spending on food, clothing and basic household items to pay for healthcare costs.
  • 33 percent say they put off or postponed needed care in the last year.
  • 20 percent say they or an immediate family member struggled to pay surprise medical bills.
  • 19 percent say they used up all or most of their savings to pay for care.

Workers with high-deductible plans have been hit especially hard. Close to half of those in a plan with at least a $3,000 individual deductible or a $5,000 family deductible said they struggled to afford healthcare in the past year.

WHY THIS MATTERS

The survey offers insights into an extremely large group of healthcare consumers that often gets overlooked in typical healthcare debates about the ACA, individual insurance market and Medicaid. That's because far more Americans are covered by employer-sponsored health insurance than are covered in the individual market or by any government program.

Roughly 156 million people in 2017 had employer-based coverage. That group represents almost half the total U.S. population--and 60 percent of non-elderly adults.

What's more, topics like healthcare costs, workers' wages, bargaining power and income inequality have become hot-button issues going into the 2020 election. Politicians running for office may seize on results such as these to push for healthcare reform through Medicare for All and lower prescription drug prices.

TREND

The L.A. Times/KFF study is among the latest of several studies revealing that healthcare costs are impacting both the physical and financial health of many Americans.

The latest J.D. Power 2019 Commercial Member Health Plan Study--which measured satisfaction among nearly 29,000 commercial members of 146 U.S. health plans--found that high co-pays for office visits have pushed cost satisfaction scores lower in recent years.

The J.D. Power report noted that overall satisfaction scores rose by 254 points when members perceived their plans to be working to keep out-of-pocket costs low, help coordinate care and offer enough coverage. The problem: Only a little over a half, 54 percent, or fewer of health plan members say their plans deliver in those three areas.

Likewise, the American Cancer Society last month found that more than half of U.S. adults experienced problems with affordability, stress, or delaying care because of cost. The study estimates more than 100 million people in the U.S. experience medical financial hardship and that "high out-of-pocket spending for medical care is an increasingly critical issue for patients in the United States."

ON THE RECORD

"While most feel the system is working well for them, about eight in ten (78 percent) people with employer coverage say the cost of healthcare for people like them is too high, with near-universal agreement across demographic groups," said the report's authors.

Mark Klimek is an independent writer and editor with 20 years' experience covering financial issues, healthcare and more.

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