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One undeniable impact of the Affordable Care Act, also known as Obamacare, is that more of the cost of health care has shifted from employers to employees. Part of that shift is attributable to an increasing proportion of high-deductible health insurance plans.
Covered workers' average dollar contribution to family coverage has increased 81% since 2004 and 37% since 2009, according to a 2014 Employer Health Benefits Survey by the Henry J. Kaiser Family Foundation.
In general, a lower health-care burden appears to be good for businesses. One unintended effect, however, could be more employee sick days and resulting losses in productivity. That is because higher deductibles mean people might delay seeking medical treatment for illnesses or injuries.
As a result, business owners and HR leaders must work with employees to educate them about health-care plan options, low-cost providers and how to take full advantage of these plans.
A report by The Heritage Foundation found the average individual deductible for employer-sponsored health insurance in 2014 was $1,135. Under the Affordable Care Act, deductibles in states with a federally run exchange average much higher, ranging from $1,203 for a gold plan to as high as $6,346 for a catastrophic plan. Family deductibles can be more than $10,000.
Those employer-sponsored plans generally offer coverage comparable to the Act's gold plans. But workers covered under the act tend to choose the higher deductible options because of their lower monthly premiums.
For 14 years, research company Gallup has asked people if they postponed medical care because of cost. In 2014, 33% said that they have elected to wait for treatment. It is the highest reading during that 14-year period.
And even though the act increased the number of people who had access to health insurance, the poll found that, "While many Americans have gained insurance, there has been no downturn in the percentage who say they have had to put off needed medical treatment because of cost."
In other words, even with insurance, many employees choose not to go to the doctor because of the out-of-pocket expense they must bear. That same 2014 Gallup poll showed that 22% of employees have delayed needed treatment for a serious medical condition in the prior year because of cost.
A study at the University of Minnesota found that men were more likely than women to delay treatment because of high insurance deductibles. That included medical care for potentially serious issues such as irregular heartbeats and painful conditions such as kidney stones. Men also ended up being hospitalized at a later date more often than women.
"By saddling employees with high out-of-pocket expenses, high-deductible health plans create strong disincentives to seeking care," the report said. "Increased cost-sharing often causes individuals to avoid care even when they need it. Racial and ethnic minorities are already more likely to avoid care due to cost, and evidence suggests that high-deductible health plans could make health care even less accessible for these communities."
Knowing these facts, it is crucial for businesses to help educate employees about high-deductible plans. This education should go far beyond the superficial annual open enrollment meeting. Education should be ongoing and delivered with multiple tools — in person, webinars, videos or with one-on-one meetings. But that is not routinely occurring. Brokers tend to be structured as sales organizations; they are not structured nor staffed to deliver the needed education.
A recent report on the impact of health-care reform showed that 75% of workers believed their employers would educate them about changes in their health care resulting from the Affordable Care Act. Conversely, the study showed that 87% of employers felt educating employees about health-care regulations was not important for their organization.
To cope effectively with changes precipitated by the health-care act, management and covered employees must recognize there are always tradeoffs. While the lower monthly premiums of high-deductible plans can be attractive for employers and employees, employees who have conditions requiring frequent medical attention must weigh the cost and benefit.
For instance, an analysis of individual employees' medical utilization and expenses over a year may reveal that it would be less costly and more productive for the employee and employer if the employee opts for a lower deductible and higher premium.
In the wake of the Affordable Care Act, incentives appear to be shifting consumers toward more affordable premiums and higher deductibles. But those savings actually can come at a disadvantageous total annual price.
The fact that higher deductible plans could be causing people to delay treatment is an important consideration for employers as they grapple with making certain that their work force has access to adequate health care. In the end, a strategy of high-deductible plans and poor employee education can be costly to an organization's productivity and profitability.
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