Consumer-driven and high-deductible health plans continue to increase their share of the health care market, according to a December 2013 report by the nonprofit Employee Benefit Research Institute (EBRI).
However, enrollment in one kind of consumer-driven health plan—employer-funded health reimbursement arrangements (HRAs)—declined, while it rose in health savings accounts (HSAs), which can include both employer and employee contributions, EBRI found.
The 2013 Consumer Engagement in Health Care Survey , conducted by EBRI and Greenwald & Associates, also found that a growing share of the high-deductible health plan (HDHP) market is HSA-eligible. HSAs must be linked to health insurance with minimum deductibles of $1,250 for individuals or $2,500 for families in 2013 and 2014. However, not everyone in an HSA-eligible HDHP has opened an HSA (to learn more about these plans, see the SHRM Online article Consumer-Driven Decision: Weighing HSAs vs. HRAs).
Among specific survey findings:
- Enrollment in a CDHP wiht either an HSA or HRA reached 9.7 percent of the population in 2013, up slightly from 2012.
- Unlike in prior years, when examined separately HRA enrollment fell to 3.8 percent in 2013, down from 4.2 percent in 2012, while HSA enrollment increased to 5.9 percent from 5.4 percent.
- Enrollment in an HDHP, with or withhout an HSA or HRA, increased to 18 percent in 2013 from 16 percent in 2012.
- Enrollment in an HDHP that is HSA-eligible increased to 7.6 percent in 2013 from 5.8 percent in 2012.
Overall, 26.1 million individuals with private insurance, representing 15 percent of that market, were either in a CDHP or in an HDHP that was eligible for an HSA but had not opened the account.
Shifts in Health Accounts Portend Bigger Changes
Average HSA balances grew from just above $1,400 in 2008 to $2,311 in 2013. In contrast, average HRA balances increased from $1,130 in 2008 to $1,236 2013.
Unlike employer-owned HRAs, HSAs are employee owned, allowing employees to invest some or all account funds within the HSA for tax-advantaged growth, similar to investing 401(k) funds.
“Currently, [HSA] account balances are low and are therefore invested in relatively safe vehicles such as money market funds,” noted EBRI's Paul Fronstin. “However, as account balances grow, the potential to invest in more diverse investment vehicles, such as mutual funds and stocks, will grow.”
The 2013 survey found that CDHP enrollees are more cost-conscious in their decision-making than those in traditional plans. “Once again, we found that CDHP enrollees were more likely to use resources to pick their health plan, more likely to use cost information before getting health care services and more likely than traditional-plan enrollees to take advantage of various wellness programs, such as health-risk assessments, health-promotion programs and biometric screenings,” noted Paul Fronstin, director of EBRI’s health research and education program and co-author of the report.
In addition, those in a CDHP were more likely than those with traditional coverage to say they had:
- Checked whether the plan would cover care.
- Asked for a generic drug, instead of a brand name.
- Talked with their doctors about prescription options and costs and about other treatment options and costs.
- Asked a doctor to recommend less costly prescriptions.
- Developed a budget to manage health care expenses.
- Checked the price of a service before getting care.
- Used an online cost-tracking tool their health plan provided.
Financial incentives also mattered more to CDHP enrollees than to traditional-plan enrollees.
Moreover, adults in a CDHP were more likely than those in a traditional plan to be engaged in their choice of health plan. For instance, they were more likely to have:
- Visited health plan websites.
- Attended a meeting where health plan choices were explained.
- Used other websites to learn about health plan choices.
- Consulted with an insurance broker to understand plan choices.
Fronstin cautioned that it’s not clear from the data whether the variations in consumer engagement can be attributed to plan-design differences or whether various plan designs attract certain kinds of individuals.
“Regardless, it is clear that the underlying characteristics of the populations enrolled in these plans are different,” he said. “As the CDHP and HDHP markets continue to expand and more enrollees are enrolled for longer periods of time, the sustained impact that these plans are having on cost, quality and access to health care services can be better understood.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Related SHRM Articles:
Consumer-Driven Plans Gain in Popularity, SHRM Online Benefits, October 2013
Consumer Satisfaction Rises for CDHPs, Still Trails Traditional Plans, SHRM Online Benefits, September 2013
Misunderstanding HSAs Poses Open-Enrollment Hurdle, SHRM Online Benefits, August 2013
In Case Study, HSA Shift Led to Sustained Savings, SHRM Online Benefits, August 2013
For 2014, Higher Limits for HSA Contributions, Out-of-Pocket Expenses , SHRM Online Benefits, May 2013
Consumer-Driven Decision: Weighing HSAs vs. HRAs, SHRM Online Benefits, updated May 2013
Health Savings Accounts Can Build Retirement Wealth, SHRM Online Benefits, October 2010
SHRM Online Benefits Topics & Strategy
SHRM Online Health Care Reform Resource Page