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Elizabeth Davis

Is Your Deductible Too High?

By August 20, 2013

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I have a suspicion that most people feel their health insurance deductible is higher than it should be. The exception might be those who've chosen a high-deductible health plan to keep premium costs down.

For many of us with job-based health insurance, our employer does all the rate-negotiations with health insurers. If we haven't switched jobs lately or shopped for individual health insurance, we may not be aware how much the average health insurance deductible is.

This year, the average deductible for a worker with job-based health insurance is $1,135 according to the Employer Health Benefits Survey done annually by the Kaiser Family Foundation and the Health Research and Educational Trust. To put this in perspective, the 2008 survey found the average deductible was $735.

Employees of large companies had lower deductibles than employees of small businesses. Large company employee deductibles average $884 compared to $1,715 for employees of small companies.

This makes me grateful for my below average deductible; although, admittedly, I don't feel all that grateful as I'm paying it.

How do you feel about your deductible? Weigh in with the poll.

August 21, 2013 at 5:57 am
(1) altonduke says:

Very great information. I am so happy to read your post.

August 29, 2013 at 11:24 am
(2) Geff@Health Insurance digest says:

Great post Elizabeth and informative as well. I think as long as the family is covered with a reasonable deductible , things should be fine compared maybe to a single person with a high insurance deductible which might not look good. Thank you

October 1, 2013 at 1:40 pm
(3) Stefani says:

We just found out that or deductible (standard insurance from husbands job.) Is $3000! His hr rep said “i have the same plan, it is what it is.” $300 a month for insurance with a $3000 deductible? Should be criminal.

October 2, 2013 at 10:59 am
(4) healthinsurance says:

Hi Stefani,
I feel your pain. I suspect this is a trend we should get used to, though. It makes job-based insurance premiums cheaper for employers(and employees) if they structure a plan such that the deductible is higher.

Also, insurers like it when their subscribers have “skin in the game.” If you have to pay $3000 before the insurance kicks in, you’re less likely to get health care services that you don’t really need. You’re a more careful shopper for health care services.

That said, I also suspect people don’t get health care services they really <strong>do</strong> need because they can’t afford to pay the deductible.

I’d love it if our economy was such that everyone had an emergency fund at least as large as their deductible so this wasn’t an issue. But, that’s not the case for most of us right now, so it <strong>is</strong> an issue.

If you have the option of an FSA or HSA and can afford to have the pre-tax money deducted from your paycheck to fund it, that’s one way to deal with the deductible issue. If you have a lower deductible option among your health plan choices, that’s another way. But, that option will either be a more restrictive health plan, have more expensive premiums, or get the same $3000 out of you by a different manner (like through coinsurance, for example.)

There’s no magic bullet here. The only way to address this successfully is through long-term health policy interventions that will keep the cost of health care services from growing more quickly than the cost of everything else. In the meanwhile, we’re all getting pinched in the middle.

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