Consumer-Driven Health Plan Participants More Cost-Conscious

By Stephen Miller, CEBS Dec 28, 2012

Adults in a consumer-driven health plan (CDHP) were more likely than those in a traditional plan to exhibit a number of cost-conscious behaviors, according to research from the nonprofit Employee Benefit Research Institute (EBRI).

CDHPs are high-deductible health plans linked to either an employee-owned health savings account (HSA) or an employer-owned health reimbursement arrangement (HRA). To learn more about these plans, see the SHRM Online article “Consumer-Driven Decision: Weighing HSAs vs. HRAs.”

High-deductible health plans (HDHPs) have lower premiums, but higher deductibles (at least $1,000 for employee-only coverage) than traditional health plans.

Enrollees in CDHPs, traditional plans and HDHPs not linked to a savings vehicle were about equally likely to report that they made use of quality information provided by their health plan. However, according to EBRI’s December 2012 Issue Brief, “Findings from the 2012 EBRI/MGA Consumer Engagement in Health Care Survey,” CDHP enrollees were more likely to do the following:

Use cost information and research information about their doctors’ costs and quality from sources other than the health plan.

Own a smartphone or a tablet. Among them, as many as one-third reported using an application (app) for health-related purposes. Among those not using an app, about one-half were very interested in using one.

Take advantage of various 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.

“It is clear that the underlying characteristics of the populations enrolled in these plans are different,” noted report author Paul Fronstin, director of EBRI’s Health Research and Education Program. “Adults in a CDHP were significantly more likely to report being in excellent or very good health, and they were significantly more likely to exercise.” Correspondingly, those in a CDHP or a HDHP without a savings vehicle were significantly less likely to smoke than were adults in a traditional plan—and CDHP and HDHP enrollees were more likely than traditional-plan enrollees to be highly educated.

CDHP Enrollment Rises

More employers are shifting to CDHPs in an effort to control the spiraling health care costs of recent years, Fronstin noted. In 2012, 12 percent of the U.S. population was enrolled in a CDHP, up 3 percentage points from 2011, according to EBRI, while enrollment in HDHPs without a savings vehicle remained unchanged at 16 percent.

Overall, 18.6 million U.S. adults ages 21–64 with private insurance, representing 15.4 percent of that market, were either in a CDHP or an HDHP that was HSA-eligible. When their children were counted, about 25 million individuals with private insurance, representing about 14.6 percent of the market, were either in a CDHP or an HSA-eligible plan.

Rand Corp.: CDHPs Promote Cost-Conscious Decisions

If half of Americans with employer-sponsored insurance switched from a traditional health plan to a consumer-directed health plan (CDHP), annual health care costs in the U.S. would fall by an estimated $57 billion, according to a 2012 report by the Rand Corporation, which cites research by Towers Watson, the National Business Group on Health and others.

Among the findings reported in "Skin in the Game: How Consumer-Directed Plans Affect the Cost and Use of Health Care":

Families that switched from a traditional health plan to a CDHP spent an average of 21 percent less on health care in the first year after switching than similar families remaining in traditional plans.

Two-thirds of the savings came from initiating fewer episodes of care; one-third came from spending less per episode.

Enrollees cut back on the use of some beneficial services, including preventive care, such as cancer screenings, even though such care was fully covered under consumer-directed plans.

"In 2011, about 17 percent of Americans with employer-sponsored health coverage were enrolled in a consumer-directed plan," the report notes. "A 2012 survey found that 59 percent of large employers offered at least one such plan. With continued cost pressures compounded by the recession, enrollment is expected to continue to grow."

"If high-deductible plans stimulate more prudent purchasing over time, they could be an important part of the answer to rising health care costs," the report concludes. "If, however, patients skimp on highly valuable services that can prevent more costly problems later, the savings may be short-lived."

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

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