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Health premiums up just 3%, deductibles soar

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Annual family premiums for employer-sponsored health insurance rose an average of 3% to $18,142 this year, a modest increase at a time when workers’ wages (2.5%) and inflation (1.1%) also grew modestly, according to the 2016 Employer Health Benefits Survey conducted by the Kaiser Family Foundation and the Health Research & Educational Trust.

On average, employers contributed $12,865 toward premiums for family coverage.

This year’s low family premium increase was similar to last year’s (4%), reflecting a significant slowdown over the past 15 years. Since 2011, average family premiums have increased 20%, more slowly than the previous five years (31% increase from 2006 and 2011) and more slowly than the five years before that (63% from 2001 to 2006).

But while premium growth is slowing, the deductibles employees pay are soaring.

That trend in part reflects more workers moving into high-deductible plans compatible with health savings accounts or tied to health reimbursement arrangements. Those plans have lower-than-average premiums.

In 2016, 29% of all workers were in such plans, up from 20% in 2014. Meanwhile, a shrinking share of workers (48% in 2016, down from 58% in 2014) were enrolled in preferred provider organization plans, which have higher-than-average premiums.

Again, partly as a result of this trend, the survey found that average deductibles continued to rise for covered workers. In 2016, 83% of covered workers faced an average deductible of $1,478 for single coverage. That’s up $159 or 12% from 2015, and $486 or 49% since 2011.

Workers in small firms of three to 199 employees paid an average deductible of $2,069, compared to $1,238 for employees in larger firms.

For the first time, the survey found that more than half of all covered workers—51%—faced deductibles of at least $1,000 annually for single coverage.

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