Consumer-Driven Health Plans Gain Ground

Thirteen percent of the privately insured U.S. population was enrolled in a consumer-driven health plan (CDHP) in 2015, according to a report by the Employee Benefits Research Institute. Sixty-three percent of those enrolled in CDHPs had an HSA; 13% had an HRA, and 24% had the option of an HSA-eligible health plan, but had not opened an HSA.

Survey: People with consumer-driven health plans do more price comparisons

People who have consumer-driven or high-deductible health plans are more likely to ask whether care is covered, seek out generic drugs and talk to their doctors about less-costly care options, according to a survey. The report notes that such plans were designed to steer consumers to more cost efficient care, but “the ability to make informed decisions is highly dependent on the extent to which people have access to useful information.” ThinkAdvisor (1/13)

A Snapshot of Consumer-Driven Health Plans

A recent survey by EBRI and Greenwald & Associates finds the following about consumer driven health plans (CDHPs):

  • 13% of the privately insured population are enrolled in a CDHP; 11% are enrolled in a high-deductible health plan (HDHP); and 76% are enrolled in more traditional coverage.
  • 26 million people with private insurance are enrolled in a CDHP—a health plan associated with a health savings account (HSA) or health reimbursement arrangement (HRA), or an HSA-eligible health plan.
  • 63% of people in CDHPs have opened an HSA, 13% are in an HRA, and 24% are in an HSA-eligible health plan, but have not opened an HSA.
  • People in a CDHP or an HDHP are more likely to have cost-conscious behaviors compared to those in traditional plans. They are more likely to have checked whether the plan would cover care; asked for a generic drug; talked to their doctors about prescription options and costs; asked a doctor to recommend a less costly drug; talked to their doctors about other treatment options and costs; developed a budget to manage health care expenses; and used an online cost-tracking tool provided by the health plan.
  • People in a CDHP are more likely to have talked to friends, family, or colleagues about the plans; attended a meeting where health plan choices were explained; and consulted with their employer’s HR staff about health plan choices.
  • People in an HDHP are more likely to have visited the health plan’s website to learn about their plans; talked to friends, family, or colleagues about the plans; used other websites to learn about their choices; and consulted with an insurance broker to understand their plan choices.
  • CDHP enrollees are more likely to take advantage of wellness programs, such as health-risk assessments, and health-promotion programs, and biometric screenings.
  • Financial incentives mattered more to CDHP enrollees than to traditional-plan enrollees.

Survey: Employers expect low growth in health care spending

Employers expect to spend about 4.2% more per employee on health care next year after making some changes to benefits plans, compared with a 6.4% increase in the absence of changes, a Mercer survey found. Many changes are to mitigate the effects of a forthcoming excise tax on health care spending above specified thresholds and include offering consumer-driven health plans, eliminating flexible spending accounts and using a privately run benefits exchange. The Wall Street Journal (tiered subscription model) (9/16), BenefitsPro.com (9/16)

Consumer-Driven Health Plans Grew 15% Last Year

Enrollment in consumer-directed health plans (CDHPs) grew by 15% in 2013, according to a survey by the American Association of Preferred Provider Organizations (AAPPO). Enrollment in the plans, which include health savings accounts, health reimbursement arrangements and flexible spending accounts, grew from 39 million in 2012 to 45 million in 2013, according to an AAPPO analysis of a Mercer survey. As major changes to the health system loomed last year, employers looked to consumer-directed health plans to offer the affordability, flexibility, and stability,” said Karen Greenrose, AAPPO president and CEO. The following are key findings:
• 23% of employers offered CDHPs last year – up from 22% in 2012.
39% of large employers (500 or more employees) offered CDHPs in 2013 – up from 36% the year before.
• 23% of small employers offered CDHPs – up from 22% in 2012. 63% of the largest employers (more than 20,000 employees) offered CDHPs in 2013 — up from 32%.
• 35% of employers expect to offer CDHPs in 2016, with 64% of large employers expecting to offer them.
• The increase continues represents a more than doubling of employers that offer CDHPs since 2008 – from 10% in 2008 to 23%. For more information, visit: http://aappo.org/Resources/Research.aspx.

Strategies Boost Employees’ Health

Certain employer strategies, such as consumer driven plans and wellness programs, are effective in motivating employees to improve their health, according to a survey from Aon Hewitt. Researchers surveyed more than 2,800 employees and their dependents covered by employer health plans. Sixty percent of employees who are enrolled in consumer-driven plans say they have made positive behavior changes related to their health; 28% get routine preventative care more often; 23% seek lower-cost health care options and 19% research health costs more frequently.

Seventy-eight percent of employees who are enrolled in consumer-driven plans are satisfied with the plans and 89% expect to re-enroll in this option for 2013. Ninety-seven percent of workers who have been in an account-based plan for two years or more say they plan to re-enroll.

Up to half of consumers would participate in a wellness activity that offered no financial incentive as long as participation was easy and convenient. Sixty-three percent of consumers would complete a health risk questionnaire for a monetary reward, and 62% would participate in a healthy eating or weight management program. Forty-eight percent would participate in a medically sponsored program to help them manage a health condition.

Fifty-eight percent of employers offer incentives for completing a lifestyle modification program (for example, to quit smoking or lose weight). About one-quarter offer incentives (monetary or non-monetary) for making progress toward meeting acceptable ranges for biometric measures, such as blood pressure, BMI, blood sugar, and cholesterol.

Eighty-six percent of workers who received suggested action steps based on a health-risk questionnaire went on to take some action, and 65% made at least one lifestyle improvement. Total health care costs per employee were $10,522 in 2012, and employers’ share of that cost was $8,318. When asked how much of the bill their employer pays, consumers significantly underestimate the portion their employers paid, guessing about half of the cost. For more information, visit www.businessgrouphealth.org.

Consumer Driven Plans Continue to Grow

Ten percent of the population was enrolled in a consumer driven health plan (CDHP) in 2012, up from 7% in 2011. Enrollment in HDHPs remained at 16%, according to a study by the Employee Benefits Research Institute (EBRI). Fifteen percent of 21- to 64-year olds with private insurance were in a CDHP or an HDHP that was eligible for an HSA. When their children were counted, about 25 million people with private insurance,were in a CDHP or an HSA-eligible plan  — representing about 14.6% of the market.

CDHP enrollees were more likely to evaluate provider cost information compared to traditional plan enrollees. They were also more likely to look outside their health plan for information about their doctors’ costs and quality. CDHP enrollees were also more likely to participate in wellness programs, such as health-risk assessments, health-promotion programs, and biometric screenings. In addition, financial incentives mattered more to CDHP enrollees than to traditional-plan enrollees.

Compared to those in traditional plans, adults in a CDHP were much more likely to say they were in excellent or very good health, much more likely to exercise, and much  less likely to smoke. CDHP and HDHP enrollees were also more likely to be highly educated. For more information, visit www.ebri.org.

Consumer-Driven Health Plans Leap Ahead of HMOs

Consumer-driven health plans (CDHPs) have surpassed HMOs to become the second most common plan design offered by U.S. employers, according to a survey from Aon Hewitt.

The 2011 survey of nearly 2,000 U.S. employers reveals that 58% offered a CDHP and 38% offered HMO plans. PPOs continue to be the most widely offered plans, with 79% of employers offering them in 2011.

Among employers that offer CDHPs, health savings accounts (HSAs) outpace health reimbursement arrangements (HRAs) (34% versus 18%). But, 43% of employees enroll in HRAs compared to 28% who enroll in HSAs. This reflects the fact that HRA plan designs are popular among large employers embarking on full replacement CDHP strategies. HRAs offer more design flexibility to the employer compared to HSAs. HSAs typically they generate lower enrollment because they are offered to employees as one of several plan options.

Maureen Fay, senior vice president and head of Aon Hewitt’s CDHP working group said that, despite an increase in prevalence, CDHP enrollment lags behind enrollment in PPO and POS plans. The average enrollment in a PPO plan was 69% in 2011 followed by POS plans (49%). Forty-three percent enrolled in a high-deductible CDHP with an HRA and 28% enrolled in a high-deductible CDHP with an HSA.

Employers are using a variety of tactics to encourage employees to enroll in these plans including subsidizing premiums at a higher level than other plan options (36%), covering preventive medications before the deductible (34%), and contributing employer funds to the HSA (30%) and HRA (22%).

More employers are also considering voluntary/elective benefits to supplement these plans, such as critical illness, hospital indemnity, and accident insurance policies. Twenty-six percent of those using this tactic report a moderate to significant increase in CDHP enrollment because of the availability of voluntary or supplemental medical benefits. While just 6% of employers use voluntary/elective benefits to complement the CDHP and encourage enrollment, 42% report they are considering this approach in the next few years.

A separate survey of 3,000 employees reveals that employees are willing to try CDHPs and their associated accounts. Employees will continue to choose them because they often come with a lower premium. However, employees find them challenging to understand and use.

Joann Hall Swenson of Aon Hewitt said, “Employees want the most cost-effective plan with the least hassle, but they often are not all that interested in digging into the details of CDHPs, HSAs, and HRAs. Our research and experience tells us that simply giving employees lots of educational information about these plans and accounts is only helpful to the small minority of people who like all the details.” To address this challenge, Aon suggests the following:

• Get the right people into the right plan. Employers need to identify the segments of their population that are most likely to sign up for a CDHP and then tailor the marketing campaign to them. They also need to monitor employees’ experience with the plan to ensure it re-sells itself and encourages consumers to have appropriate health and financial behaviors.
• Explain how employees can benefit from the plan’s key features. They also need to tell employees what very specific about the actions consumers need to take.
• Make it easy for employees and their families to use the plan. This includes removing barriers to care through initiatives like value-based plan designs or full funding of employer contributions to HSA/HRA accounts at the beginning of the year.
• Navigate new tools to help employees select appropriate treatments and providers based on available cost and quality information.
• Offer activities, such as biometric screenings and health risk assessments, to help employees assess their health opportunities and risks.
• Use resources, like health coaches and disease management nurses, to help employees meet their goals of health improvement and maintenance.
• Follow preventive care guidelines.
• Manage chronic conditions by working closely with the employee’s physician and adhering to evidence-based treatment protocols.

For more information, visit www.aonhewitt.com.

Last Updated 06/23/2021

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