Consumer-Driven Health Plans More Prevalent Among Higher Earners

While enrollment in consumer driven and high-deductible health plans rose slightly in 2007, these plans still make up a small segment of the health insurance market, and consumer-driven health plans (CDHPs) were disproportionately chosen by people with higher incomes, according to a survey published by the Employee Benefit Research Institute (EBRI) and the Commonwealth Fund.

The third annual EBRI/Commonwealth Fund Consumerism in Health Care Survey questioned 4,217 privately insured U.S. adults between the ages of 21 and 64 in late 2007 about their health insurance coverage. Results showed that enrollment in consumer-driven health plans with tax-advantaged Health Savings Accounts (HSAs) made up 2% of the privately insured adult population, up from 1% in 2006.

Meanwhile, enrollment in high deductible health plans (HDHPs) (defined as plans with minimum deductibles of $1,100 for individuals and $2,200 for families) climbed to 11% of the privately insured adult population in 2007, up from 7% the previous year. This means, researchers noted, that roughly 2.3 million U.S. adults participated in CDHPs, and 12.5 million adults were enrolled in HDHPs, in 2007. While HDHP participants are generally eligible to set up an HSA to help cover their medical expenses before meeting the deductible, 42% of respondents with HDHPs said they do not have an HSA.

“Although consumer-driven plans have been around since 2001, market penetration is small,” said Paul Fronstin of EBRI, lead author of the issue brief on the survey. “Employers, especially large employers, appear to be increasingly providing the plans as an option, but enrollment has yet to take off.”

The survey also found that the percentage of CDHP enrollees with household incomes above $100,000 increased to 31% in 2007, up from 22% in 2005; while the percentage of CDHP enrollees with household incomes below $50,000 fell to 19% in 2007, from 33% in 2005. In addition, the survey showed that 23% of HDHP enrollees had incomes of more than $100,000, up from 15% in 2007. Over the same period, researchers observed, there was little change in the income levels of people enrolled in more comprehensive plans.

The findings further indicated that enrollees in CDHPs and HDHPs are more conscious of the cost of medical care than those in comprehensive plans, and they are more likely to discuss the cost of treatment options and medications with their doctors. The survey also found that individuals in CDHPs and HDHPs use health services and preventive screens at rates similar to those of enrollees in comprehensive plans. At the same time, however, the 2007 survey results revealed that, as in previous years, people in consumer-driven and high-deductible plans are more likely than those in comprehensive plans to report that they had skimped on needed medical care or medications due to cost considerations.

Survey respondents enrolled in CDHPs and HDHPs were asked about their levels of satisfaction with the plans they had selected. The findings indicated that people enrolled in these plans are less satisfied with various aspects of their health care coverage than participants in more comprehensive plans, but that satisfaction levels among CDHP and HDHP enrollees were higher in 2007 than in 2006. Specifically, researchers said, there was a significant increase in the share of CDHP enrollees who said they would recommend their plan to a friend or coworker and who said they would stay in the plan if they had the opportunity to move to a different form of coverage.

In addition, the survey found that just 7% of enrollees in CDHPs had been uninsured prior to signing on to their current plans, compared with 15% of HDHP enrollees and 28% of respondents with comprehensive coverage. The average respondent in a CDHP and HDHP also reported being in better health than respondents in more comprehensive plans, and they were less likely to say they have chronic conditions or smoke.

“These findings show that over the three years of the survey, more people in consumer-driven plans are earning higher incomes, tend to be healthier, and are no more likely to have been uninsured prior to enrolling than people in traditional health plans,” said co-author Sara Collins of the Commonwealth Fund. “These plans are not yet solving the problems they set out to address.”