Health Insurance
Rate of Workers Enrolled in High-Deductible Health Plans Jumps for 8th Year in Row to Record 55.7%
Health care benefits can add great value to an employee’s compensation package but can be costly.
High-deductible health plans (HDHPs) are what they sound like, with higher deductibles than traditional offerings. But those higher deductibles usually lead to lower premiums. Workers who generally are healthy and don’t utilize their health insurance frequently might find this arrangement more appealing.
More than half (55.7%) of American private-sector workers were enrolled in HDHPs in 2021, the highest on record — dating to 2012 — and the eighth straight yearly increase. We’ll highlight the states in which HDHPs are more common and show where that’s changed since 2017.
Table of contents
Key findings
- 55.7% of American private-sector workers were enrolled in high-deductible health plans (HDHPs) in 2021 — the highest on record and the eighth straight yearly increase. That rate is up 5.3% from 2020, 14.5% from 2017 and 83.7% from the low in 2013.
- Maine had the highest rate of private-sector workers enrolled in HDHPs in 2021. In Maine, 76.2% of these workers were enrolled in HDHPs — the only state above 70.0%. Behind Maine were Tennessee (68.7%) and Nebraska (67.6%). None of these three states was among the top 10 in 2020.
- Just 11.6% of private-sector workers in Hawaii were enrolled in HDHPs in 2021 — the lowest in the nation. The next closest states doubled (District of Columbia, 28.4%) and tripled (Alaska, 42.4%) that rate. Hawaii was also the lowest state in 2020 at 17.6%, with an almost identical gap with D.C.
- Since 2017, the rate of private-sector workers enrolled in HDHPs jumped the most in Arkansas. 58.0% of Arkansas workers were enrolled in HDHPs in 2021, a 60.8% jump from 36.1% in 2017. Louisiana (57.2% increase) and New Jersey (45.4%) were next. Only six states saw decreases in this period, led by the District of Columbia (13.8%), South Dakota (7.3%) and New Hampshire (5.8%).
HDHP enrollment up for 8th straight year
As of 2021 (the most recent data available), 55.7% of American private-sector workers were enrolled in HDHPs. This record high represents an eighth consecutive annual increase in HDHP enrollments. The percentage is up 5.3% from 2020, 14.5% from 2017, 83.7% from 2013 and 62.6% from 2012.
The following chart outlines yearly increases (and one decrease) in HDHP enrollment from 2012 through 2021.
Rate of American private-sector workers enrolled in HDHPs
Year | Workers enrolled in HDHPs | Year-over-year % change |
|---|---|---|
| 2012 | 34.3% | N/A |
| 2013 | 30.3% | -11.5% |
| 2014 | 35.2% | 16.0% |
| 2015 | 39.4% | 12.0% |
| 2016 | 42.6% | 8.1% |
| 2017 | 48.7% | 14.2% |
| 2018 | 49.1% | 0.9% |
| 2019 | 50.5% | 2.9% |
| 2020 | 52.9% | 4.8% |
| 2021 | 55.7% | 5.3% |
Source: ValuePenguin analysis of State Health Compare tool data
As a reminder, HDHPs generally come with lower premiums than other types of health insurance.
"With health insurance costs rising over the years, it's not surprising that HDHPs are growing in popularity," says Divya Sangameshwar, ValuePenguin health insurance expert.
She says employers may also prefer HDHPs over traditional preferred provider organizations (PPOs) and health maintenance organizations (HMOs) as they’re cheaper.
HDHPs are designed to reduce unnecessary health care spending and encourage consumers to actively manage their health care costs. Instead of paying high premiums for benefits you might never use, an HDHP allows you to decide how to spend your health care dollars.
Additionally, HDHPs can be combined with some form of savings option to allow you to set aside pretax dollars for out-of-pocket health care expenses. The savings options take several forms, including tax-free individual health savings accounts (HSAs) and employer-sponsored health reimbursement arrangements (HRAs).
Maine has highest rate of workers enrolled in HDHPs; Hawaii has lowest rate
In some states, enrollment in HDHPs is much higher than in others. For example, most private-sector workers in Maine are enrolled in HDHPs (76.2%) — more so than in any other state. Other states with a high HDHP enrollment level include Tennessee (68.7%) and Nebraska (67.6%). Interestingly, none of these three states was among the top 10 in 2020.
In 2012, 53.2% of private-sector workers in Maine were enrolled in HDHPs — the highest across the U.S. and nearly 20 percentage points higher than the national average at the time. Maine also had the highest percentage of private-sector workers in HDHPs in 2014 and 2018, marking 2021 as a return to the top.
Firms with more than 50 employees carry Maine’s high percentage. 77.3% of private-sector workers in Maine enrolled in HDHPs work at firms with more than 50 workers — the highest in the U.S. and more than 20 percentage points higher than the national average. This rate decreases to 71.2% in the state at firms with fewer than 50 employees, but that’s still No. 5 behind Ohio (80.5%), New Hampshire (75.4%), Georgia (75.3%) and Tennessee (74.0%).
Tennessee had the third-highest rate of private-sector workers enrolled in HDPHs in 2017 and the fourth-highest in 2014 — similar to its second-place ranking in 2021. Nearly 7 in 10 (68.0%) of private-sector workers enrolled in HDHPs in 2021 were at firms of more than 50 workers, the third-highest in the U.S.
Nebraska’s No. 3 ranking is more of a surprise as the state hasn’t been in the top five since 2012, when 42.3% of private-sector workers in the state were enrolled in HDHPs. In 2021, the state had the second-highest rate of private-sector workers enrolled in HDHPs at firms of more than 50 workers (68.1%), a 6-percentage-point jump from 62.1% in 2020. A record number of workers had quit their jobs in 2021, so large shifts in the percentage by firm size were reasonable between 2020 and 2021.
To recap the three states with the highest HDHP enrollment rates:
States with highest rate of American private-sector workers enrolled in HDHPs
Rank | State | Workers enrolled in HDHPs, 2021 |
|---|---|---|
| 1 | Maine | 76.2% |
| 2 | Tennessee | 68.7% |
| 3 | Nebraska | 67.6% |
Source: ValuePenguin analysis of State Health Compare tool data
Meanwhile, some states have very low HDHP enrollment levels. In Hawaii, only 11.6% of private-sector workers were enrolled in an HDHP, followed by D.C. (28.4%) and Alaska (42.4%.) Hawaii also had the lowest HDHP enrollment in 2020 at 17.6%, and D.C. had an almost identical gap at that time.
Varying state laws on employer-sponsored health care plans can contribute to why some states such as Hawaii have low HDHP enrollment. According to a 2022 analysis from Becker’s Payer Issues, the passing of the Prepaid Health Care Act in 1974 in Hawaii led to the creation of an employer mandate for medical insurance coverage. This law also blocked employer efforts to save money — including the implementation of HDHPs.
Federal law also requires HDHPs to have larger out-of-pocket maximums and deductibles than Hawaii’s benchmark plan (the HMSA Preferred Provider Plan 2010). This can make it very difficult for Hawaiian employers to offer HDHPs to their employees.
Dating to 2012, Hawaii has been at the bottom eight times:
- 2013 (7.9%)
- 2014 (3.1%)
- 2015 (12.9%)
- 2016 (11.8%)
- 2017 (9.3%)
- 2019 (12.6%)
- 2020 (17.6%)
- 2021 (11.6%)
It was second-lowest in 2012 (14.4%) and not ranked in 2018.
The following chart recaps the three states with the lowest HDHP enrollment rates:
States with lowest rate of American private-sector workers enrolled in HDHPs
Rank | State | Workers enrolled in HDHPs, 2021 |
|---|---|---|
| 1 | Hawaii | 11.6% |
| 2 | District of Columbia | 28.4% |
| 3 | Alaska | 42.4% |
Source: ValuePenguin analysis of State Health Compare tool data
Here’s a look at the full list:
Full rankings
Rate of American private-sector workers enrolled in HDHPs (by state)
Rank | State | Workers enrolled in HDHPs, 2021 |
|---|---|---|
| 1 | Maine | 76.2% |
| 2 | Tennessee | 68.7% |
| 3 | Nebraska | 67.6% |
| 4 | Kentucky | 67.1% |
| 5 | Colorado | 66.4% |
| 6 | North Carolina | 66.1% |
| 7 | Arizona | 66.0% |
| 8 | New Hampshire | 65.3% |
| 9 | Ohio | 64.7% |
| 10 | Utah | 64.1% |
| 11 | Wisconsin | 63.1% |
| 12 | Idaho | 62.9% |
Source: ValuePenguin analysis of State Health Compare tool data
Since 2017, rate of workers enrolled in HDHPs has jumped most in Arkansas
Some states have seen major growth in private-sector worker enrollment in HDHPs since 2017 — particularly Arkansas (60.8%), Louisiana (57.2%) and New Jersey (45.4%).
States with biggest jumps in American private-sector workers enrolled in HDHPs
Rank | State | 2017 | 2021 | % change, 2017 to 2021 |
|---|---|---|---|---|
| 1 | Arkansas | 36.1% | 58.0% | 60.8% |
| 2 | Louisiana | 39.3% | 61.8% | 57.2% |
| 3 | New Jersey | 35.5% | 51.6% | 45.4% |
Source: ValuePenguin analysis of State Health Compare tool data
Six states saw a decrease in HDHP enrollment during that same period. The states that saw the biggest drops were D.C. (13.8%), South Dakota (7.3%) and New Hampshire (5.8%).
States with biggest dips in American private-sector workers enrolled in HDHPs
Rank | State | 2017 | 2021 | % change, 2017 to 2021 |
|---|---|---|---|---|
| 1 | District of Columbia | 32.9% | 28.4% | -13.8% |
| 2 | South Dakota | 67.3% | 62.4% | -7.3% |
| 3 | New Hampshire | 69.3% | 65.3% | -5.8% |
Source: ValuePenguin analysis of State Health Compare tool data
HDHP annual plan averages
While HDHPs often come with lower premiums than other types of health insurance, they can still involve upfront costs. The following table outlines Kaiser Family Foundation data that reflects the average cost of an employer-sponsored HDHP for the 2022 plan year:
Annual plan averages, 2022
Single coverage | Family coverage | |
|---|---|---|
| Premium | $7,832 | $21,708 |
| Worker contribution to premium | $1,405 | $6,241 |
| General annual deductible | $2,925 | $6,013 |
| Out-of-pocket maximum | $5,328 | N/A |
| Firm contribution to HRA or HSA | $1,815 | $3,322 |
Source: Kaiser Family Foundation 2022 Employer Health Benefits Survey
Annual premiums rose between 2021 and 2022. In 2021, single coverage cost $7,441, on average, and family coverage was $21,662. In 2022, these costs rose to an average of $7,832 for single coverage and $21,708 for family coverage.
With consumer goods prices also rising between 2021 and 2022, it’s easy to see why so many Americans are feeling financial pressure right now. This severely impacts how much money is available for health care spending.
HDHP affordability example
Let's look at an example to see how an HDHP might make health care costs more affordable.
Two individuals are looking for health insurance. Person A purchases a high-deductible health insurance policy with a $2,500 annual premium and $5,000 deductible, while Person B decides on a higher annual premium ($3,500) and lower deductible ($2,000).
If both individuals incurred $5,000 in medical expenses during the year, Person B would save $2,000 more than Person A.
Person A | Person B | |
|---|---|---|
| Annual premium | $2,500 | $3,500 |
| Deductible | $5,000 | $2,000 |
| Medical expenses | $5,000 | $5,000 |
| Total costs (premium and deductible costs) | $7,500 | $5,500 |
Since Person B had a deductible $3,000 lower than Person A, they could get more of the $5,000 medical expense covered by their insurance provider — assuming insurance pays 100% of medical costs after the deductible.
Who should — and shouldn’t — consider an HDHP?
An HDHP isn’t the right fit for everyone, but some consumers can really benefit financially from this type of health insurance plan if all goes well with their health. Not sure if an HDHP is right for you? Here’s some insight into who should consider taking on a high deductible and who shouldn’t.
Who should consider an HDHP?
- Those who are generally in good health. Not needing to turn to your health insurance too often is key if you want to benefit financially from an HDHP. "HDHPs encourage healthy living routine preventive care, and comparison shopping for high-quality, low-cost medical services," Sangameshwar says.
- Those who have an HSA. If you like the idea of low monthly premiums, Sangameshwar recommends having extra money set aside in an HSA. "If you plan to use your insurance for routine preventive screenings, an HDHP can help maximize your health care dollars," Sangameshwar says.
- Those who can afford the deductible. Because you’re paying upfront for covered medical expenses, you’ll be charged a lower, negotiated rate between the health care provider and the insurance company. Preventive services like vaccinations, colonoscopies, mammograms and flu shots are covered at 100%, so there’s no need to budget for these services. "Since you’re directing your health care spending, you’ll likely make healthier lifestyle choices that will lower your risk for chronic conditions and expensive medical procedures," Sangameshwar says. "It’s important to spend time understanding how your HDHP works and how you can take advantage of it."
Who shouldn’t consider an HDHP?
- Those whose deductibles are too high for their budget. An HDHP isn’t a good idea if the deductible is much higher than you can afford. "A plan like that may force you into skipping care altogether or not filling prescriptions because you worry about going into debt to afford care," Sangameshwar warns.
- Those whose employers don’t contribute to your HSA or HRA. HDHPs can become very expensive if they don’t come with an HSA or HRA. Money in an HSA can be used tax-free at any time to pay qualified medical costs. If your employer doesn’t contribute to your HSA plan and all contributions come from you, you’ll need to do the math to figure out if you can set aside enough money to meet the deductible and out-of-pocket maximum.
- Those who suffer from chronic conditions. According to Sangameshwar, an HDHP is not a good idea if you suffer from chronic conditions or illnesses requiring regular care. "You’ll need to pay your entire deductible out of pocket before you can get covered, making it extremely expensive to seek the life-saving care you need," Sangameshwar says. "It makes no sense to opt for a cheaper plan only to pay thousands of dollars more for care." If you need to manage a chronic condition, you might benefit from a more expensive plan with a lower deductible. You don’t have to take the plan your employer offers — you can and should shop around — by looking at the plans offered by your spouse or partner’s employer, or by shopping around for a plan on HealthCare.gov. "Don’t get turned off by the high sticker prices of plans on the government health care exchange," Sangameshwar advises. "You might qualify for subsidies that’ll reduce your premiums to a more affordable level."
Methodology
ValuePenguin researchers analyzed data from the State Health Compare tool, which aggregates the rate of U.S. private-sector workers enrolled in high-deductible health plans (HDHPs) nationally and by state.
Annual plan averages for employer-sponsored HDHPs for the 2022 plan year are via the Kaiser Family Foundation 2022 Employer Health Benefits Survey.