High-Deductible Health Plans Gaining Momentum

Sept. 30--The cost of premiums for health insurance, shared by workers and companies, is growing more slowly as more workers shift into high-deductible plans.

The average annual health insurance premium for a single worker was $6,435 last year, though most of those workers pay a small portion of that cost directly. On average, they paid $1,158 in premiums.

According to the Kaiser Family Foundation Employer Health Benefits Survey, the cost of worker-only insurance remained the same between 2015 and 2016.

The cost of premiums to cover a family, however, climbed 3 percent, to $18,142. On average, the worker's share of the premium for those plans was $5,277.

The Kaiser Family Foundation says the shift away from preferred provider organization plans -- or PPOs, which have the fewest restrictions on choice of doctors and services -- and toward high-deductible plans is happening quickly. Over the last two years, enrollment in PPOs fell 10 percentage points, to 48 percent of workers. At the same time, enrollment in high-deductible plans climbed 9 points, to 29 percent.

Fewer than 20 percent of companies offer their workers a choice of plans. At 29 percent of those firms that only offer one kind of insurance, the one choice is a high-deductible plan.

Gary Piantedosi, founder of Stamford benefits and HR consulting firm CBP, said the employers his company serves generally offer choices. CBP's clients have between 50 and 1,000 workers, and about two-thirds are in Connecticut.

He said more than 80 percent of clients offer a high-deductible plan, usually paired with a health savings account, or HSA.

"If they are still offering a co-pay plan, that would be a secondary option," he said. The employer signals that the more comprehensive insurance is secondary by charging more to employees for those premiums.

Piantedosi said employers increase cost-sharing to employees through premiums and by raising deductibles in order to manage medical inflation. He said if companies didn't change these things, their costs would increase more than 10 percent a year rather than 4 to 6 percent.

Even some large employers, which generally have the most generous benefits, are shifting away from PPOs. Starting on Jan. 1 this year, The Hartford no longer allowed new enrollees in its PPO, which has a $700 individual deductible for in-network services, a $2,100 family deductible, and guarantees that an individual's out-of-pocket spending will be limited to $3,300, as long as they stay in the network. The family deductible went up $300 from 2015.

"Like many companies, The Hartford continues to shift toward consumer-directed health plans," the company told its workers in its open enrollment literature last fall.

UnitedHealth Group only offers high-deductible plans to its Connecticut workers, though there is a choice of $1,900 to $3,200 deductibles.

Piantedosi said that's typical for companies in the health insurance industry.

For workers who have an annual deductible, the average went up $160 in 2016, to $1,478. For those in a high-deductible plan, the average deductible was $2,199. However, workers who are in those plans often get contributions from employers to their HSAs. On average, the employer puts in $686, or $1,208 for family coverage, the Kaiser survey said. But 25 percent of workers in HSA plans get no contribution from the employer.

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