High Out of Pocket Costs for HDHPs
While rates of health care use between people enrolled in HDHPs and conventional plans are similar, and differences in premiums and deductibles are marginal, out of pocket costs are significantly higher for those in HDHPs. Forty-five percent of those with incomes under $50,000 spent 5% or more of their income on out-of-pocket costs, and 15% spent more than 10%. Among people in the same income group enrolled in conventional plans, only 14% spent more than 5% and just 3% spent more than 10%.5
Cost is Clearly a Factor
Cost is clearly a factor for employees in making a decision of what type of insurance plan to purchase, as well as decisions about seeking care. When compared to persons covered by traditional, comprehensive insurance plans, individuals enrolled in high-deductible plans are more likely to put off seeking needed care and are more likely to consider the cost of care when deciding to seek health care services.6
In Arizona, Premiums – and the Employee’s Share of Premium Cost – Continue to Increase
In 2004, the average total family premium per enrolled employee was $8,979, significantly lower than the national average of $10,006. For single coverage, the difference was much smaller, $3,438 in Arizona v. $3,705 for the U.S. Family coverage premiums charged to the smallest firms, those with fewer than ten employees, are significantly higher ($9,357) than the rates paid by medium-sized firms with 25-99 employees ($6,803).7
As premiums have increased, enrollment has declined.
In 1996, 55.1% of Arizona firms offered health insurance, increasing to 62.9% in 2000, only to fall again to 56.1% in 2004. While the number of firms that offer health insurance is similar to 1996, enrollment in family coverage has declined by 40% from 55.4% of employees in 1996 to just 33.5% in 2004. During this same period, premiums increased by 95%, from $4,605 to $8,979 and the employee’s share of cost more than doubled, from $1,074 to $2,235.8
In addition, Arizona residents are less likely to receive health insurance coverage through an employer, and more likely to be uninsured or to receive coverage through the Arizona Health Care Cost Containment System (AHCCCS), the state’s Medicaid program.
Compared to the U.S. average of 62.6%, only 54% of Arizona’s private sectors workers are now enrolled in employer-sponsored health insurance.
5 Fronstin, Paul and Sara Collins. (2005) Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings from the EBRI/Commonwealth Fund Consumerism in Health Care Survey. Employee Benefit Research Institute; Washington, D.C. Issue Brief #288; December 2005. Available at: http://www.ebri.org/pdf/briefspdf/EBRI_IB_12-2005.pdf.
6 Ibid .
7 Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends, Medical Expenditure Panel Survey-Insurance Component. Accessed 10/2/06 from:http://www.meps.ahrq.gov/mepsweb/data_stats/quick_tables_search.jsp?component=2&subcomponent=2.