Average Health Insurance Deductible For Group PPOs Now $1,000

Average Health Insurance Deductible For Group PPOs Now $1,000 in Group Health Insurance

Yesterday, HR consulting and investment firm Mercer, released a report that found the average deductible for an employer-sponsored PPO health insurance plan is $1,000 for 2008.

Last year, the average PPO deductible was half that at $500. In fact, according to the Mercer report, the $500 average held from 2001 to 2007. In 2000, the average was $250.

So why are group health insurance deductibles increasing?

There were a few key points to this increase, says the report. The first was that health care cost for employers went up by 6 percent for the last four years. That’s led to a near-nationwide trend of cost shifting to employees through higher deductibles and higher premiums.

Another was the increasing popularity of high-deductible consumer-directed health plans and Health Savings Accounts (HSAs). Such plans are now offered by 20 percent of large businesses.

Really, though, this is another way of cost shifting to employees. Higher deductibles and HSAs mean workers pay for more of their own health care costs out-of-pocket.

That’s not to say there aren’t advantages to consumer-directed plans and HSAs. You can save money tax-free in an HSA, and you still have major medical coverage in case of emergency.

But these plans are generally best for those who don’t often need care.

The bottom line, though, is that as deductibles go up, wallets get thinner.

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