Rising Health Deductibles Take Bigger Bite Out Of Family Budgets

Health care costs continue to rise, and workers are shouldering more of the burden.

The big reason? Skyrocketing deductibles.

More companies are adding deductibles to the insurance plans they offer their employees. And for those who already had to pay deductibles, the out-of-pocket outlays are growing.

Note: Bars represent the average family premium for employer-based insurance. They are the total paid and reflect contributions by employers and workers.

Source: Kaiser Family Foundation survey

Together that means that the average worker has to pay $1,077 before their health plan will cover any medical expenses, according to a survey released Tuesday by the Kaiser Family Foundation and The Health Research and Education Trust. That's a 67 percent increase in five years.

The higher deductibles — combined with more modest but consistent increases in premiums — mean health cost for consumers are growing faster than income, and taking an ever larger bite out of household budgets.

"Deductibles have been going up so much faster than wages, almost seven times faster than wages," said Drew Altman, president and CEO of the Kaiser Family Foundation. "When out-of-pocket costs are going up at a time when wages are flat, the pain level is still pretty high."

He said higher deductibles are particularly difficult for people with chronic illnesses. "They may not get the health care they need if they have a very big deductible," he said.

Nearly 2,000 employers were surveyed during the first half of 2015 about their health insurance benefits. The survey found that premiums rose about 4 percent. The average premium for family coverage obtained on the job is $17,545 annually, or $1,462 a month, the survey found. The worker's contribution, or share of the premium, averages $4,955 a year for a family plan.

The rise in 2015 continued a decade-long trend of relatively modest premium increases. Prior to 2005, insurance rates were rising at double-digit rates each year.

Still, smaller premium increases and higher deductibles are likely related.

"If you're an employer ... one of the things you can do to hold your premium down now — right away — is increase the deductible," Altman says.

The premium slowdown is all but invisible to consumers, Altman says, because their own costs have risen so dramatically.