Consumer-driven health plan popularity increasing

Consumer-Driven Health Plan (CDHPs) popularity is growing. According to new research by Aon Hewitt in its 2013 Health Care Survey, CDHPs are the second most popular plan offered by employers, and more employers plan to offer them to their employees in the future. Aon found that CDHPs are second behind preferred provider organizations (PPOs) and could beat PPOs in popularity in the coming five years.

As their name suggests, CDHPs give employees more flexibility and power in handling their health care. Consumer-driven health care combines a high-deductible health plan with a health savings account (HSA) or health reimbursement account (HRA) to pay for routine health care expenses. Plan contributions are pre-tax and can either be funded by the employer, employee or both. Unused balances roll over year-to-year in an HSA so that employees can use them toward future expenses.

Aon surveyed around 800 large and mid-size U.S. employers.

Some key findings from their survey:

  • 56% of employers currently offer CDHPs
  • 30% are considering offering CDHPs in the next 3-5 years
  • 10% of employers offer CDHPs as the only plan option
  • 44% are considering offering CDHPs exclusively in the next 3-5 years.

CDHPs also contributed to lower costs for employers in 2012, with employers reporting a “2 percentage point lower cost trend" (4%) as compared to other plans such as PPOs (6%), HMOs (7%) and Exclusive Provider Networks (6%).

"With many of the operational details of health care reform yet to be implemented, employers are confronting the realities of compliance and the significant challenges they face in controlling future health care costs," said Maureen Fay, senior vice president at Aon Hewitt. "Employers are increasingly embracing plan designs that are cost-effective, promote consumer choice and accountability, and encourage employees to be more deliberate in how they spend their health care dollars."

Taking Control Of Health

Employers are encouraging CDHP enrollment by making these plans a default plan option, or even subsidizing premiums at a higher level than for other plans (44%). CDHP enrollment also revealed that consumers are satisfied with these plans and plan to re-enroll. Aon found 97% percent of employees enrolled in a CDHP for more than two years plan to re-enroll. Aside from a general high satisfaction, consumers also felt they made more “informed health decisions," as 66% of those enrolled said they made “positive behavior changes related to their health." Among these positive behavior changes were increased routine preventative care (28% of respondents reported this) and 19% researched health costs more often.

"Effective consumer-driven health plans are designed to help change employee behaviors by encouraging employees to make better informed health care decisions and to take ownership for actively managing their health through prevention and lifestyle choices," said Jim Winkler, chief innovation officer for Health & Benefits at Aon Hewitt. "Incentives also play a critical role in motivating employees to change behavior. Initially, extrinsic incentives help engage employees in focusing on behavior change. Over time, as healthy behavior patterns start to stick and employees feel good about the results they have achieved, employers can shift their focus more toward intrinsic motivators."

By giving consumers more control over their health care, the hope is that that might increase their understanding of available coverage, too. A Kaiser Family Foundation poll found 51% of Americans feel they don't have enough information about the Affordable Care Act (ACA). They're interested in hearing about costs associated with the law as well as looking for a simple summary of how the law works and how it might affect them. Kaiser also reported that people think coverage of the law has been overly politicized rather than giving enough practical details about the law.

We'll keep you posted on more health care reform news right here on the FSAstore.com blog.

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