Today, I link to and excerpt from ValuePenguin‘s post, Rate of Workers Enrolled in High-Deductible Health Plans Jumps for 8th Year in Row to Record 55.7%
by Jacqueline DeMarco, updated Jan 30, 2023
Maine has the highest rate of private-sector workers enrolled in HDHPs, while Hawaii has the lowest rate. We also address who should — and shouldn’t — consider an HDHP.
All that follows is from the above resource.
Health care benefits can add great value to an employee’s compensation package but can be costly.
High-deductible health plans (HDHPs) are what they sound like, with higher deductibles than traditional offerings. But those higher deductibles usually lead to lower premiums. Workers who generally are healthy and don’t utilize their health insurance frequently might find this arrangement more appealing.
More than half (55.7%) of American private-sector workers were enrolled in HDHPs in 2021, the highest on record — dating to 2012 — and the eighth straight yearly increase. We’ll highlight the states in which HDHPs are more common and show where that’s changed since 2017.
Table of contents
- Key findings
- HDHP enrollment up for 8th straight year
- Maine has highest rate of workers enrolled in HDHPs; Hawaii has lowest rate
- Since 2017, rate of workers enrolled in HDHPs has jumped most in Arkansas
- HDHP annual plan averages
- Who should — and shouldn’t — consider an HDHP?
HDHP annual plan averages
While HDHPs often come with lower premiums than other types of health insurance, they can still involve upfront costs. The following table outlines Kaiser Family Foundation data that reflects the average cost of an employer-sponsored HDHP for the 2022 plan year:
Annual plan averages, 2022
Single coverage Family coverage Premium $7,832 $21,708 Worker contribution to premium $1,405 $6,241 General annual deductible $2,925 $6,013 Out-of-pocket maximum $5,328 N/A Firm contribution to HRA or HSA $1,815 $3,322
Source: Kaiser Family Foundation 2022 Employer Health Benefits Survey
Annual premiums rose between 2021 and 2022. In 2021, single coverage cost $7,441, on average, and family coverage was $21,662. In 2022, these costs rose to an average of $7,832 for single coverage and $21,708 for family coverage.
With consumer goods prices also rising between 2021 and 2022, it’s easy to see why so many Americans are feeling financial pressure right now. This severely impacts how much money is available for health care spending.
Who shouldn’t consider an HDHP?
- Those whose deductibles are too high for their budget. An HDHP isn’t a good idea if the deductible is much higher than you can afford. “A plan like that may force you into skipping care altogether or not filling prescriptions because you worry about going into debt to afford care,” Sangameshwar warns.
- Those whose employers don’t contribute to your HSA or HRA. HDHPs can become very expensive if they don’t come with an HSA or HRA. Money in an HSA can be used tax-free at any time to pay qualified medical costs. If your employer doesn’t contribute to your HSA plan and all contributions come from you, you’ll need to do the math to figure out if you can set aside enough money to meet the deductible and out-of-pocket maximum.
- Those who suffer from chronic conditions. According to Sangameshwar, an HDHP is not a good idea if you suffer from chronic conditions or illnesses requiring regular care. “You’ll need to pay your entire deductible out of pocket before you can get covered, making it extremely expensive to seek the life-saving care you need,” Sangameshwar says. “It makes no sense to opt for a cheaper plan only to pay thousands of dollars more for care.” If you need to manage a chronic condition, you might benefit from a more expensive plan with a lower deductible. You don’t have to take the plan your employer offers — you can and should shop around — by looking at the plans offered by your spouse or partner’s employer, or by shopping around for a plan on HealthCare.gov. “Don’t get turned off by the high sticker prices of plans on the government health care exchange,” Sangameshwar advises. “You might qualify for subsidies that’ll reduce your premiums to a more affordable level.”