The average deductible now costs an average of $1,300 per year for an individual insurance plan. (Photo: Getty Images/Er Ten Hong)
Health insurance deductibles are steadily going up — and they’re rising at a much faster rate than our incomes.
That’s one of the major findings from a new analysis by the Kaiser Family Foundation, a health policy research group. Specifically, the foundation discovered that deductibles (the amount you pay toward your medical bills each year before your coverage kicks in) have increased more than six times faster than workers’ wages since 2010.
Four out of five people who receive health care from their employer now pay a deductible, which has increased to an average of $1,300 per year for an individual insurance plan (up from $900 in 2010). The analysis also discovered that one in five employees has a deductible of $2,000 or more.
Sarah O'Leary, founder of Exhale Healthcare Advocates, a national consumer health-care advocacy group, tells Yahoo Health that she’s not surprised by the findings.
“The insurers realize that Americans must carry insurance, which gives them a great deal of financial opportunity and leverage,” she says. “The state and federal governments have been largely unsuccessful in protecting individuals and families from premium and deductible (both in and out of network) increases.”
O’Leary points out that this comes at a time when employer-provided health insurance is also decreasing: “Experts estimate that less than 60 percent of employees get their benefits from employers.” For those that do provide benefits, they’re increasingly passing the increased insurance costs to their employees.
As a result of the rising costs of insurance, more people are choosing health insurance plans with a lower monthly cost and higher deductible, health care expert and consultant Howard Peterson, a managing partner of TRG Healthcare, tells Yahoo Health.
The danger in that, he says, is that they can end up in a sticky financial situation if an emergency arises. “Now, more people are covered by health insurance, but those people either don’t have the ability or elect to not pay their copayments or deductibles,” he says. That can lead to bad debt — for individuals and for hospitals — and even bankruptcy for a growing number of people. “The greatest number of bankruptcies in the U.S. is health-care-related,” Peterson says.
More people are also avoiding or delaying care due to high deductibles, health care expert Caitlin Donovan, spokeswoman for the National Patient Advocate Foundation, tells Yahoo Health.
“We hear from patients all the time who don’t seek out care because of high out-of-pocket costs,” she says. “This issue intimately links people’s financial and their personal health, because when they delay care, they often exacerbate their systems and wind up in the hospital, driving up costs.”
Politicians are taking notice: Rising out-of-pocket healthcare costs have become a big topic for the 2016 presidential election.
On Wednesday, Hillary Rodham Clinton unveiled her plan to help Americans tackle the high cost of medical bills. That proposition includes requiring insurance plans to provide three sick visits a year that don’t count toward a person’s annual deductible and a refundable tax credit of up to $5,000 for families that aren’t eligible for Medicare to deal with high health care costs, the Associated Press reports.
High prescription costs are also being targeted. Both Clinton and Bernie Sanders have announced plans to work to lower prescription costs for the insured. Sanders also introduced a bill to Congress in early September that, among other things, would ban the practice of brand-name drug companies paying their competitors to keep less-expensive generic substitutes off the market.
Is there anything we can do in the meantime?
While shopping for a plan, Donovan says it’s a good idea to consider any procedures or office visits that you’re fairly sure you may have in the next year and doing your homework on the plan’s coverage. “Sometimes a plan with higher monthly premiums will cost less on an annual basis because the deductibles and other cost-sharing amounts are less,” she says.
Once you pick a plan, police it. When it comes to non-emergency care, O’Leary says it’s important to ask how much it will cost before getting care and to call your insurance company before getting any non-emergency tests or procedures to make sure they’re covered.
O’Leary also advises appealing any denial of claims that seem off (she says over half of the time, the denial will be overturned after the first appeal) and checking your medical bills for errors.
But Peterson acknowledges that there’s no easy answer, especially because people don’t know in advance what kind of health care coverage they will need in the future. “Obamacare only addressed the issue of coverage; It didn’t address the issue of affordability,” he says.