High Deductible Health Plans - Not So Popular
The BNA Pension & Benefits Blog has an interesting discussion on the seeming lack of popularity of high deductible health plans. It seems:
An objective national survey (by the Kaiser Family Foundation and Health Research and Educational Trust) reports that in 2006 only about 7 percent of American employers offered an HSA-qualifying HDHP or an HDHP with a HRA. Four percent of workers were enrolled in these products -- and only 19 percent of employees who were offered these products along with other health coverage options enrolled in such a plan. The proportion of firms offering and employees enrolling in these products in 2006 were not statistically significantly different from those in 2005.
A few years ago it seemed as though these plans were all the rage. Some of the reasons attributed to their lack of popularity, according to BNA, include:
- that their average national total cost (the HDHP premiums plus the employer contributions to an HSA or HRA, if employers make such a contribution) is no lower than that of traditional plans (like HMOs and PPOs).
- employee premium contributions for the HDHP plans are similar to those for other types of coverage, yet the consumer-directed plans include much higher cost sharing.
- While the current HDHP + HSA model has been in place only 3 years, research on experience of HRAs and other earlier types of individual spending accounts reveal mixed results.
- people who enroll in such plans are younger and healthier and have higher incomes than those who do not.
- only 10 percent of Americans account for 69 percent of health care costs --- because they either have expensive long-term chronic illness or experience high cost acute episodes. Even if these people desire to be "prudent" health care purchasers, they quickly exhaust their deductibles and thereafter no longer have such an economic incentive.
- some opponents of the consumer-directed model express concern that high deductible plans create incentives to skimp on early preventive and primary care that will lead to worse health and no reduction in (but possibly higher) overall spending for their later care.