Deductibles march higher for employer-provided heath insurance

Millions of workers -- whether employed by small, medium or large companies -- must now pay an average of $1,001 out of their own pockets before their health insurance coverage begins paying a share of the expenses. That's up 17% from $859 last year.

"Raising the deductible has become the fallback for employers faced with cost increases they can't handle," said Laura Baker, a consultant for Mercer, the benefits consulting firm that conducted the annual survey of about 2,900 companies. "It's the easiest way to reduce cost without taking more out of every employee's paycheck."

The survey findings applied to preferred provider organizations, offered in many employee group benefit packages. Health maintenance organizations, another popular benefit option, don't have deductibles.

Employers say workers are having to pay more because healthcare coverage is more expensive, up 6.3% to an average of $8,482 per worker this year, according to Mercer. (In Los Angeles, costs rose 5.4% to $7,958 per worker for medical, dental and vision coverage.) To offset steep premium increases, companies are opting for higher deductibles.

Baker said employers were bracing for potentially bigger increases next year. "Historically, downturns in the economy have often correlated with higher medical trends," she said.

But higher deductibles could prompt cash-strapped workers to think twice about visiting a doctor, and healthcare experts have long argued that people who avoid treatment end up having bigger medical problems -- at greater cost -- later.

"What this says is that the employers are desperate," said Len Nichols, an economist who heads the health policy program at the New America Foundation, a nonpartisan Washington think tank. "They are doing everything they can to reduce premium growth this year. But it's not thinking 10 years down the road."

There is mounting evidence that people are skipping checkups, tests and other medical care to cut their own expenses. Physicians and hospitals are reporting a drop in patient visits and revenue and a rise in late payments and unpaid bills.

A recent Kaiser Family Foundation survey found that the shift toward higher deductibles had been most dramatic at firms with three to 199 workers, where more than 1 in 3 workers must pay at least $1,000 out of pocket before their plan kicks in.