Employees have a difficult decision when it comes to health insurance – high premiums or high deductibles? In the last five years, the number of employees enrolled in high-deductible plans has more than doubled to 29% of the US workforce, according to a new employer survey from benefits consultant Mercer. Although these plans can potentially lead to several thousands of dollars in out-of-pocket medical costs, people have decided that the potential up-front savings are worth the risk. “Most employees are choosing to move into them of their own free will,” said Beth Umland, the Research Director for Health and Benefits at Mercer. On average, families saved almost $150 per month in premiums by opting for the higher deductible plans.
The move to high-deductible plans has left many employees facing sticker shock. With large deductibles, they may pay full price for a costly test or medication, uncovering the real cost of health care (The New York Times).
This New York Times article uses the recent EpiPen controversy as an example of the dilemma people face when selecting deductible levels; people in low-deductible plans would likely not have realized there was a jump to the new $600 price tag for the Pen. While the higher payments reflect the reality of the cost of health care, it is also true that increases in premiums continue to outpace wage growth.
For people who are generally healthy, they may seldom utilize their insurance and so not experience a high deductible, which is why they are popular among younger people who want to save money with lower monthly premiums and who are not likely to incur high medical bills. The risk is that people with high-deductible plans may avoid necessary care because they do not have the out-of-pocket funds available to cover it. The article also lays out other possible risks that could occur on a larger scale. Read it here.