Income Gap Narrows for CDHP vs. Traditional Plan Enrollees

Those in consumer-driven plans are better educated, healthier

By Stephen Miller, CEBS May 30, 2011

In the decade that consumer-driven health plans (CDHPs) have existed in the U.S. they have tended to attract participants who are better educated, healthier and have higher incomes than people in traditional health plans, according to a report by the not-for-profit Employee Benefit Research Institute (EBRI). But in recent years, the income gap has begun to narrow, according to EBRI's 2010 Consumer Engagement in Health Care Survey.

Health savings accounts (HSAs) and health reimbursement arrangements (HRAs) collectively are known as “consumer-driven” health plans and are designed to give workers more control over how they pay for their health coverage (see the SHRM Online article, "Consumer-Driven Decision: HSAs vs. HRAs").

EBRI found that in 2005 CDHP enrollees were more likely than traditional plan enrollees to have household income of $150,000 or more, but by 2010 this was no longer the case. In 2010, CDHP enrollees were more likely to have household income of $50,000$100,000 but were not more likely to have household income of $100,000 or more.

Among the findings in the EBRI report:

Education level.CDHP enrollees and those enrolled in a high-deductible health plan (HDHP), whether or not linked to a CDHP, consistently have reported higher education levels than traditional plan enrollees.

Age.In most years of the survey, the CDHP and HDHP populations were less likely to be young (ages 21-34) than the population with traditional coverage. Younger workers may feel they have less disposal income to pay higher deductibles, although starting to fund an HSA earlier in life provides greater opportunity for account growth over time. In 2010, the CDHP and HDHP populations were more likely to be ages 35-44. There were no significant differences among those aged 45-54 between CDHP vs. traditional plan enrollees, and no recent differences among enrollees aged 55-64.

Health status. CDHP enrollees consistently have reported better health status than traditional plan enrollees. In addition, they have exhibited better health behavior than traditional plan enrollees with respect to smoking, exercise and, recently, obesity rates. On the other hand, enrollees in HDHPs not linked to CDHP accounts have been less likely than those with traditional coverage to report that they smoke, but no recent differences were found in exercise rates, and differences have not been found in obesity rates.

Paul Fronstin, director of EBRI’s Health Research and Education Program and author of the report, said that other than for these factors, there are no clear demographic differences between enrollees in CDHPs and traditional health plans.

Stephen Miller, CEBS, is an online editor/manager for SHRM.​

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