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Milliman: New Plans May Not Bring Healthier Lifestyles

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NU Online News Service, Sept. 24, 11:15 a.m. – Health maintenance organization executives doubt the new “defined-contribution” or “consumer-driven” health plans will do much to make Americans live healthier lives, according to a preliminary survey report from Milliman USA, Seattle.

Milliman, a large actuarial consulting firm, surveyed more than 400 HMOs about the defined-contribution market while conducting its 2002 HMO Intercompany Rate Survey.

Detailed results won’t be available until October, but Milliman says the HMO executives who responded believe employees will be more excited about controlling the personal care accounts than about taking responsibility for making their own care decisions.

The executives are also skeptical about the idea that giving employees more information about the cost of care will cause them to quit smoking, exercise more or make other radical lifestyle changes to cut health care costs.

Milliman notes that defined-contribution plans could end up taking two different forms.

The typical defined-contribution health plan combines catastrophic health insurance with employer-funded personal care accounts that employees can use to pay for routine health care expenses.

The U.S. Treasury Department recently released guidance for employers that use special “health reimbursement accounts” to provide the personal care accounts. Workers will be able to receive HRA contributions and keep unused HRA assets in the accounts at the end of the year without having to pay income taxes on the contributions.

But some employers could still end up using traditional Flexible Spending Accounts rather than HRAs, Milliman says.

Employees who have FSAs must use their FSA funds by the end of the year or risk losing the funds.


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