Recent years have seen Utahns’ monthly premiums and deductibles on their employer-backed insurance plans climb dramatically, a new report says.
Premiums leapt by at least 30 percent from 2006 to 2016, while at the same time many Utah employers shifted to plans with high deductibles — coverage that requires workers to pay more of their medical costs out of pocket when they get sick.
As a result Utah families “are really getting hit from both sides of the health insurance plan,” said Sam Brucker, a research analyst with the Utah Foundation, which compiled the study.
Foundation researchers sought to track how much Utah residents are spending on health coverage in recent years and what may be driving up costs, including fast-rising drug prices.
The study came in response to a 2016 survey that found Utahns were more concerned about health care costs than any other issue.
A primary focus of the Utah Foundation report was employer-sponsored insurance — and for good reason: Nearly 61 percent of Utahns receive coverage through their employer, the highest percentage in the U.S., where the national average is 49 percent.
That high reliance on workplace insurance is largely due to Utah’s smaller elderly population, which lowers the share of the state’s population relying on government-funded Medicare health coverage. Another factor, Brucker said, is the state’s relatively large family size and robust middle class, which together translate into more young Utahns being covered by their parents’ work insurance plans.
All those factors have combined to sharpen the impact on Utah residents of more employers opting for high-deductible insurance plans, Brucker said.
In 2006, just three percent of Utahns were covered by such plans, which require customers to pay between $1,350 and $2,700 of their own medical costs each year before their insurance coverage kicks in.
By 2016, that share of Utahns with high out-of-pocket deductibles had surged tenfold to 30 percent, with most of the increase coming from employer-sponsored plans. The average deductible amount for both single people and families on employer plans almost doubled over the same period of time, the report said.
Monthly premiums on employer-based plans also climbed significantly over that decade — by 30 percent for individuals and 34 percent for a family, the Utah Foundation research found. But those increases were actually “modest compared to the increases in the late 1990s and early 2000s,” according to the report, and remained in a range considered affordable.
But the leveling off of premium increases can be misleading, because employers have often pushed more health care costs on to their employees at the same time, the report said. Such strategies include hiking deductibles, offering health savings accounts, and limiting spousal coverage, among other steps.
“While premiums appear to be affordable, when you actually use the plan, it can be very unaffordable,” Brucker said.
The foundation report also tracked large increases in the prices of plans available on the subsidized exchanges created by the Affordable Care Act, also known as Obamacare. The price of a mid-level silver plan in Salt Lake County rose by 62 percent from 2017 to 2018, while bronze and gold plans went up by about 20 percent.
Enrollees who receive a premium subsidy from the federal government did not feel that increase, as the subsidy rose along with rising premiums. But the estimated 14 percent of Utahns enrolled in Obamacare exchanges who do not have low enough incomes to qualify for federal subsidies are “feeling the full brunt” of those price hikes, Brucker said.
She warned of “more uncertainty as we move into 2019” for Obamacare. That’s when people without health insurance will no longer face financial penalties, a change that experts suspect could further destabilize U.S. insurance marketplaces and send premiums climbing again.
Overall the primary driver of higher health insurance costs, the report’s authors said, is a rising cost of care.
“This is in large part due to the prices charged for pharmaceutical drugs and common diagnostic practices, which are in some cases nearly double the prices charged in comparable nations,” the Utah Foundation report said, adding that declining competition between health insurance companies has reduced pressure to keep prices low.