High-deductible plans are a popular choice among employers because they can offer employees an affordable premium. These plans also come with the added benefit, for employers, of meeting affordability requirements set by the ACA. Currently the affordability threshold is 9.6%, the maximum percentage an employee can contribute. If premiums are too high, employers may exceed the affordability requirement, which means the employer needs to contribute more to monthly premiums payments for their employees. Some businesses can struggle with this extra cost.

The beginning of an unfortunate spiral

Employees may also struggle. Low premium, high-deductible plans have deductibles that can reach a staggering $5,000-$6,000. While employees don't have high monthly payments to make, high deductibles can keep them from getting appropriate care. According to a recent KFF (Kaiser Family Foundation) report, 44% of insured adults worry about how they will pay their medical bills in the event of an accident or illness. This means almost half of insured adults have concerns about seeking medical care. In these cases, health insurance is not doing its intended job. Although health insurance is available to employees on paper, the threat of medical debt, or worse, bankruptcy, can prevent members from using that insurance and getting health care. These employees can be considered functionally uninsured.

The spiral continues

About 40% of adults have postponed or skipped medical care as a result of high costs. While dental care is the leading service to be declined, some may avoid care for ongoing treatment or decline medically advised procedures such as X-rays and MRI scans. Prescription costs are also being avoided by employees, who may cut medication in half to extend usage. Some may skip medication entirely.

Instant Insights /

The negative spiral of high-deductible plans

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