As head of human resources for a Minnesota company with 1,600 employees that manufactures equipment for the mining industry, Scott Arndt saw the writing on the wall five years ago: Health insurance premiums were going to keep increasing by leaps and bounds unless his company, Superior Industries International, did something.
Superior Industries is the largest employer in Morris, Minn., and it made a choice that was unusual in the region: It signed up for a high-deductible health plan with a health reimbursement account. That means to ease the pain of a $2,000 deductible for a single person and a $4,000 premium for a family, it deposits half the deductible in its employees' accounts. Over the last year, the company has been able to hold down premium increases — last year there was a zero percent bump, and for the coming calendar year, it expects a modest 4 percent increase.
This one workplace mirrors a national trend in which workers are finding themselves responsible for a greater portion of their health insurance costs. The Kaiser Family Foundation on Tuesday released the results of its annual survey of employer health plans, finding that while there was a relatively modest 4 percent increase in premiums, deductibles have continued a steep upward trend. Deductibles for a single person's coverage have risen nearly seven times as fast as wages and inflation and almost three times as fast as premiums over the past five years.
"We continue to see a steady, steady increase in deductibles and out-of-pocket costs, which is now really adding up," said Drew Altman, president of the Kaiser Family Foundation.
Smaller businesses, with less than 200 employees, have higher deductibles — on average $1,836. That means while the country has famously been in a period of historically slow growth in health-care costs, due largely to the recession, that moderation has been nearly invisible to many people who are shouldering a greater portion of the cost. It also means that a political fight that has centered largely around the Affordable Care Act has left behind the effect these high deductibles have on America's wallets and health.
"There's been a quiet revolution in health insurance from more comprehensive to less comprehensive health insurance, with no real discussion or national debate," Altman said. "I don't see anything on the horizon that will, at least for now, stop the steady growth we're seeing in deductibles. I do think we're at the beginnings of a discussion about the growing deductibles and what's good and bad about them, and for whom."
Higher deductibles are a tool to reduce unnecessary health-care use, because people are more likely to think twice about seeing a doctor or getting tests they might not need if they are footing more of the bill. But for chronically ill people whose wages are increasing slowly, such increased cost-sharing could be a new financial strain and even a deterrent to seeking care.
Altman sees the health policy debate shifting. The discussion about whether to repeal or replace the Affordable Care Act is fading. High deductibles and high drug costs could be the new emerging health policy issues that may lead the debate in the campaign. Drug costs have already gotten politicians' attention; perhaps high deductibles are next.