Workers already hammered by rising health care costs increasingly are facing out-of-pocket $1,000 deductibles for medical treatment.
The median deductible costs for employees in group health plans nationally doubled this year, according to a report issued Wednesday by consulting firm Mercer.
As recently as 2000, about half of all U.S. employers offered health plans requiring no deductibles — the amount paid upfront by workers before their insurance kicks in.
But in 2008, four out of five company plans required deductibles, plus premiums averaging $124 a month for single workers in preferred-provider plans, according to Mercer.
Employers have been able to level off their annual cost increases at about 6 percent over the past four years, largely through charging higher monthly premiums and annual deductibles to workers.
“Raising the deductible has become the fallback for employers faced with cost increases they can’t handle,” said Chris Watts, the head of Mercer’s health and benefits consulting office in Denver. “It’s the easiest way to reduce cost without taking more out of every employee’s paycheck.”
Ironically, while a declining economy has reduced costs in some sectors, it could have the opposite effect in health care. That’s because workers who fear for their job security tend to use more medical services while they still have the certainty of coverage. The result can be an increase in overall health care costs.
“But these are different times, and history may not repeat itself,” Watts said. “Higher employee cost-sharing — like a $1,000 deductible — could prevent that spike in utilization that we’ve seen in other recessions.”
The Mercer report showed that health benefit costs in Colorado are $8,794 per employee, 3.7 percent higher than the national average of $8,482. In 2008, plan costs for Colorado employers increased 8.2 percent compared with the national rise of 6.3 percent.
Denver-based health care analyst Jim Hertel said a troubling trend outlined in the Mercer report is the tendency for fewer employers to offer early-retiree health coverage.
Only 27 percent of employers offer coverage for workers who retire before Medicare eligibility, compared with 46 percent 15 years ago.
A survey of health care costs released last month by Lockton Benefit Group showed Colorado costs rising by 13.7 percent this year, the biggest increase since 2004.
Steve Raabe: 303-954-1948 or sraabe@denverpost.com
