Why are Deductibles Rising?

Although employer-based health insurance plans account for most of the health coverage plans in the United States, covering approximately 150 million people, workers are not as quick to enroll as they once were. A patient in need of medical care must pay his insurance deductible before the insurance company begins covering the cost of treatment, and with the average deductible being near $2,000 in 2016, countless patients are foregoing insurance altogether.

According to a Health Research & Educational Trust survey conducted by the Kaiser Family Foundation, the average health insurance deductible costs for employer-based insurance plans increased by 12 percent in 2016. Workers who were already tired of paying expensive premiums and high deductibles were hopeful about the new Affordable Care Act, also known as Obamacare. Many are disappointed, because based on the survey, Obamacare has had virtually no impact on ever-increasing insurance costs and deductibles.

One reason why Obamacare is having little impact is because the large number of employers that don't want to pay more for employee health insurance are cutting work hours to make employees ineligible for insurance coverage altogether. Reducing the hours of full-time workers just slightly can alleviate employers of this heavy financial burden and still keeps them in compliance with the Affordable Care Act.

This is not the case with all companies, however, as many have shifted workers from part-time to full-time in order to make them eligible for health care coverage. However, these companies are choosing insurance plans with high premiums and deductibles in order to decrease the amount they have to pay towards health insurance, which translates to more out-of-pocket expenses for workers.

The main reason why deductibles are rising is because employers are paying less towards insurance costs and placing this financial obligation on their employees. Workers are having a hard time keeping up, since insurance premiums and deductibles are rising much faster than wages, according to Kaiser Family Foundation CEO Drew Altman. Families that decide to go without insurance are willing to take the risk, because it alleviates them of a huge financial burden.

While individuals are not obligated to sign up for health insurance through an employer, they are obligated by most states to carry vehicle insurance and select a medical coverage option from their automobile insurance provider. Automobile insurance costs are also increasing, and since drivers are obligated to have it, cutting auto insurance out of the monthly budget is usually not an option.

Medical premiums are already high, and adding high deductibles to the equation means that many families can't afford their health insurance payments. Some families have no choice but to go without health insurance, and health care enrollment is expected to remain low if the issue of increasing premiums and deductibles isn't debated, explains Altman.

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