What is a deductible?

A deductible is the specific dollar amount an individual must pay before a health insurance plan begins to reimburse a patient for medical expenses. The higher the deductible, the lower the up-front premium cost for a health insurance plan. The ClaimLinx Simple Option Solution teaches employers and employees how to utilize a health insurance plan for the best possible cost savings.

Related Post: Higher Deductibles Shift Health Costs to Employees

Higher Deductibles Shift Health Costs to Employees

In recent years, the rise in healthcare premium costs has slowed significantly. But many consumers have not felt the change, as expenses have shifted to plan members.

Staying on trend with recent years, premiums for job-based medical insurance rose by just 4 percent in 2015, with the average single coverage plan costing $6,251 and the average family plan costing $17,545.

But deductibles, the amount plan members contribute for care before the insurance company pays the bulk of a bill, have continued to rise, much faster than total healthcare costs.

Related Post: What are copays, deductibles and coinsurance?

The Kaiser Family Foundation and the Health Research and Education Trust surveyed nearly 2,000 large and small employers on insurance premiums, employee contributions, deductible costs and average member salaries.

The recently published findings show the burden of overall healthcare costs shifting to members through rising deductibles. It’s an especially concerning trend, as the wages have not risen at the same rate in recent years.

“The so-called great slowdown in healthcare costs has been all but invisible to consumers because deductibles have been going up so much faster than their wages,” Drew Altman, CEO of the Kaiser Family Foundation said.

According to the survey, 46 percent of workers receiving coverage through their workplace have a deductible of at least $1,000 this year. Almost 20 percent of workers have deductibles more than $2,000.

The average dollar amount for deductibles for individual plans has risen by more than 65 percent since 2010 while premiums have risen by only 25 percent. Meanwhile, worker wages have risen by only about 10 percent.

Whether this trend will continue in the future remains contested among analysts. Healthcare costs have grown faster than the rest of the economy for decades, pressing on the pockets of workers and employers alike, but they slowed significantly after the 2008 financial crisis.

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Experts predict employer-sponsored insurance premiums will rise as the economy improves, but they are not expected to reach the 11 percent average annual growth seen from 1999 to 2005.

Ultimately, it will become increasingly important to be mindful of overall healthcare cost sharing among employers, employees and the insurance company in the future.