Health Insurance
High-Deductible Health Plan Enrollment Falls for First Time Since 2013
Employers' health care benefits can attract and retain in-demand workers, especially when costs are competitive. One option is high-deductible health plans (HDHPs), which typically come with higher deductibles than traditional plans but lower premiums. With these, generally healthy workers who don't often utilize their insurance could see significant savings.
More than half of American private-sector workers (53.6%) were enrolled in HDHPs in 2022, but that figure was down from 55.7% in 2021 — the first dip since 2013, even if it's still the second-highest rate dating back 10 years. South Dakota workers (72.2%) were the most likely to enroll in HDHPs, while Hawaii employees (21.8%) were the least likely.
We looked at the states in which HDHPs were more (or less) common and how enrollment rates changed in recent years.
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Key findings
- After record-high enrollment, the percentage of private-sector employees enrolled in high-deductible health plans fell for the first time since 2013. 53.6% of private-sector employees were enrolled in HDHPs in 2022, down from 55.7% in 2021 — the highest on record. This was the first time HDHP enrollment fell since 2013.
- South Dakota had the highest rate of private-sector employees enrolled in HDHPs in 2022. In South Dakota, 72.2% of private-sector employees were enrolled in HDHPs — the only state above 70.0%. Maine, the state with the highest enrollment rate in 2021, followed at 67.8%. New Hampshire (66.6%) rounded out the top three.
- Just 21.8% of private-sector employees in Hawaii were enrolled in HDHPs in 2022. That means Hawaii has had the lowest rate of private-sector employees enrolled in HDHPs for the past nine years for which the state had available data. The District of Columbia (36.4%) followed in 2022, marking its fourth appearance in a row as the second-lowest-ranking state. It was followed by Alabama (37.3%).
- Between 2021 and 2022, 18 states saw an increase in HDHP enrollment. North Dakota saw the largest jump, with HDHP enrollment increasing by 10.3%. Despite consistently ranking as the state with the lowest HDHP enrollment, Hawaii had the second-largest jump at 10.2%. Alaska (10.1%) followed.
- In the same period, HDHP enrollment dropped in 32 states. Idaho saw the largest decline, with HDHP enrollment dropping 11.5%. Not far behind, HDHP enrollment in Louisiana fell 11.4%, followed by Florida (10.7%).
HDHP enrollment fell for the first time since 2013
HDHP enrollment soared over the past 10 years, but enrollment fell in 2022 for the first time since 2013. The most recent data shows that 53.6% of workers in private companies signed up for HDHPs in 2022, down from a peak of 55.7% in 2021.
ValuePenguin health insurance expert Divya Sangameshwar says this is a natural consequence of employers offering a wider array of health plans, including PPOs (preferred provider organizations) and HMOs (health maintenance organizations), as well as HDHPs linked to health savings accounts (HSAs).
In 2018, 22% of employers with 20,000 or more workers offered HDHPs exclusively. By 2022, that figure plummeted to 9%, according to Mercer’s National Survey of Employer-Sponsored Health Plans. Among employers with 500 or more workers, that figure dropped from 13% in 2018 to 10% in 2022, the report shows.
"With more options, it isn't surprising to see pandemic-weary Americans opting for plans that provide more coverage," Sangameshwar says.
The following chart sheds light on how HDHP enrollment has changed in the past 10 years:
Rate of American private-sector workers enrolled in HDHPs
Year | Workers enrolled in HDHPs |
|---|---|
| 2013 | 30.3% |
| 2014 | 35.2% |
| 2015 | 39.4% |
| 2016 | 42.6% |
| 2017 | 48.7% |
| 2018 | 49.1% |
| 2019 | 50.5% |
| 2020 | 52.9% |
| 2021 | 55.7% |
| 2022 | 53.6% |
Source: ValuePenguin analysis of State Health Compare tool data.
South Dakota has the highest HDHP enrollment rate, while Hawaii has the lowest
In 2022, South Dakota had the highest percentage of private-sector employees opting for HDHPs, at 72.2%. The Mount Rushmore State — No. 14 in HDHP enrollment in 2021 — was the lone state surpassing the 70.0% mark. Maine (67.8%) and New Hampshire (66.6%) followed.
States with highest rate of American private-sector workers enrolled in HDHPs
Rank | State | Workers enrolled in HDHPs, 2022 |
|---|---|---|
| 1 | South Dakota | 72.2% |
| 2 | Maine | 67.8% |
| 3 | New Hampshire | 66.6% |
Source: ValuePenguin analysis of State Health Compare tool data.
The previous year, Maine topped the list. But the two states that followed in 2021 — Tennessee and Nebraska — were outside the top five in 2022, finishing seventh and sixth, respectively.
Meanwhile, the two states at the bottom in 2022 — Hawaii (21.8%) and the District of Columbia (36.4%) — were in the same spots the year before. This time, Alabama (37.3%) replaced Alaska for the third-worst enrollment rate. Alaska saw a significant increase between 2021 and 2022, but more on that soon.
States with lowest rate of American private-sector workers enrolled in HDHPs
Rank | State | Workers enrolled in HDHPs, 2022 |
|---|---|---|
| 1 | Hawaii | 21.8% |
| 2 | District of Columbia | 36.4% |
| 3 | Alabama | 37.3% |
Source: ValuePenguin analysis of State Health Compare tool data.
Full rankings: Rate of American private-sector workers enrolled in HDHPs (by state)
Rank | State | Workers enrolled in HDHPs, 2022 |
|---|---|---|
| 1 | South Dakota | 72.2% |
| 2 | Maine | 67.8% |
| 3 | New Hampshire | 66.6% |
| 4 | Colorado | 66.0% |
| 5 | Wisconsin | 65.4% |
| 6 | Nebraska | 65.3% |
| 7 | Tennessee | 64.4% |
| 8 | Iowa | 64.2% |
| 9 | Indiana | 63.7% |
| 10 | North Dakota | 63.6% |
| 11 | Georgia | 63.1% |
| 12 | Texas | 62.9% |
Source: ValuePenguin analysis of State Health Compare tool data.
HDHP enrollment jumped the most in North Dakota but fell the most in Idaho
From 2021 to 2022, HDHP enrollment rose in 18 states. North Dakota experienced the most substantial increase at 10.3%.
Despite Hawaii regularly having the lowest HDHP enrollment, it had the second-largest leap between 2021 and 2022 at 10.2%, with Alaska close behind at 10.1%.
States with the biggest jumps in American private-sector workers enrolled in HDHP
Rank | State | % change, 2021 to 2022 |
|---|---|---|
| 1 | North Dakota | 10.3% |
| 2 | Hawaii | 10.2% |
| 3 | Alaska | 10.1% |
Source: ValuePenguin analysis of State Health Compare tool data.
This is a major shift from the 2021 movers and shakers, though we looked at a longer period. In 2021, Arkansas (60.8%), Louisiana (57.2%) and New Jersey (45.4%) saw the biggest growth in HDHP enrollment since 2017.
Going back to 2021 to 2022, HDHP enrollment declined in 32 states. Idaho experienced the most significant drop, with a decrease of 11.5% in HDHP enrollment.
Louisiana (11.4%) and Florida (10.7%) were close behind. None of the states that saw the largest decreases in 2021 were in the bottom three for dips in 2022 (though it's important to remember that we analyzed five-year changes rather than one-year). The states that saw the largest declines from 2017 to 2021 were D.C. (13.8%), South Dakota (7.3%) and New Hampshire (5.8%).
States with the biggest dips in American private-sector workers enrolled in HDHPs
Rank | State | % change, 2021 to 2022 |
|---|---|---|
| 1 | Idaho | -11.5% |
| 2 | Louisiana | -11.4% |
| 3 | Florida | -10.7% |
Source: ValuePenguin analysis of State Health Compare tool data.
Full rankings: Where American private-sector workers enrolled in HDHPs grew the most
Rank | State | % change, 2021 to 2022 |
|---|---|---|
| 1 | North Dakota | 10.3% |
| 2 | Hawaii | 10.2% |
| 3 | Alaska | 10.1% |
| 4 | South Dakota | 9.8% |
| 5 | District of Columbia | 8.0% |
| 6 | Texas | 7.4% |
| 7 | Massachusetts | 5.3% |
| 8 | Connecticut | 5.2% |
| 9 | Washington | 4.4% |
| 9 | Montana | 4.4% |
| 11 | New Jersey | 4.2% |
| 12 | Iowa | 4.0% |
Source: ValuePenguin analysis of State Health Compare tool data.
HDHP annual plan averages
Yes, HDHPs typically offer lower premiums compared to other health insurance options. But deductibles are generally higher. So what does that look like?
Below is a KFF breakdown of annual plan averages for HDHPs/HRAs (health reimbursement accounts) for the 2023 plan year. This can give you a better idea of how much you can expect to spend if a medical emergency requires you to owe a deductible or make payments toward your out-of-pocket maximum.
Annual plan averages for HDHPs/HRAs, 2023
Annual plan average | Single coverage | Family coverage |
|---|---|---|
| Premium | $8,217 | $22,404 |
| Worker contribution to premium | $1,421 | $5,857 |
| General annual deductible | $2,944 | $6,080 |
| Out-of-pocket maximum | $5,456 | N/A |
| Firm contribution to the HRA | $1,618 | $2,906 |
Source: KFF 2023 Employer Health Benefits survey.
Annual premium averages for HDHPs/HRAs rose from 2022, when they were $7,832 for single coverage and $21,708 for family coverage.
With rising costs for essentials like groceries hitting consumers hard these days, there may be little money left over in the budget for health care spending. The lower premiums associated with HDHPs pose risks if you need to file a claim, but they could help you lighten your monthly financial load otherwise.
KFF also breaks down annual plan averages for HDHPs that are health savings account-qualified in 2023.
An HSA is a tax-advantaged savings account linked to an HDHP, allowing individuals to save money for medical expenses while enjoying tax benefits on contributions and withdrawals for qualified health care costs.
Annual plan averages for HSA-qualified HDHPs, 2023
Annual plan average | Single coverage | Family coverage |
|---|---|---|
| Premium | $7,662 | $22,378 |
| Worker contribution to premium | $1,136 | $5,173 |
| General annual deductible | $2,518 | $4,674 |
| Out-of-pocket maximum | $4,415 | N/A |
| Firm contribution to the HSA | $657 | $1,203 |
Source: KFF 2023 Employer Health Benefits survey.
Considering an HDHP? Here's what to know
If you have the option to choose an HDHP as your health insurance plan, there are a few things you need to consider when deciding if it's right for you.
- All plans are different. "Not all HDHPs are created the same, so it's important to take a moment to read through what yours would offer and how it'll work for your medical needs," Sangameshwar says. An HDHP can be good, she says, if the deductible is only slightly higher than a more traditional plan, if choosing one is the only way you can contribute to an HSA or if your employer offers you cash incentives to select an HDHP. As a rule of thumb, if you can't afford the HDHP's deductible and out-of-pocket maximum or your prescriptions or other medical needs with the plan, it may not work for you.
- Expect low premiums. According to Sangameshwar, the most appealing aspect of an HDHP is the low monthly premium. For those who are healthy and don't have regular medical expenses beyond annual physicals and screenings, an HDHP offers significantly more savings than a traditional, low-deductible plan. "Since checkups and screenings are counted as preventive care, HDHPs typically cover them, making overall medical expenses low," she says. "An HDHP can be especially appealing if it comes with an HSA that employers contribute toward. This will offer employees a cushion in case of any emergency medical expenses."
- Be prepared for out-of-pocket expenses. The trade-off for a low deductible is steep out-of-pocket expenses. "HDHPs do come with downsides, like $8,050 for an individual or $16,100 for a family in out-of-pocket expenses in 2024," Sangameshwar says. "This can be a huge expense for the 64% of Americans living paycheck to paycheck, and the 49% admitting they can't afford a $1,000 emergency expense."
- Your health status matters. If you have ongoing health issues or chronic conditions requiring regular medical attention, opting for an HDHP might not be the best move for you. The necessity to pay the full deductible before receiving coverage can make it exceedingly costly to access essential, lifesaving treatments.
- You can benefit from HSA or HRA access. HDHPs can be costly without an associated HSA or HRA. Funds in an HSA can be utilized tax-free for eligible medical expenses at any time. If your employer doesn't contribute to your HSA and all the funding originates from you, it's essential to calculate whether you can set aside adequate funds to cover the deductible and out-of-pocket maximum.
- You take on risk. For the millions of Americans struggling to make ends meet, Sangameshwar says an HDHP can be a gamble. "A medical emergency will require them to pay their deductible up front and costs beyond that up to the out-of-pocket maximum, which can send them deep into medical debt." She warns that having an HDHP may also drive enrollees to skip medical care for fear of the cost of the visit, testing and prescriptions. Skipping medical care can lead to more serious health issues and drive up the likelihood of an expensive medical emergency, Sangameshwar says.
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 2023 plan year are via the KFF 2023 Employer Health Benefits survey.