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Health Account Plans Pull Ahead Of Indemnity Plans

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“Consumer-driven health plans” appear to be covering more U.S. workers than “conventional” health insurance plans.

Researchers at the Henry J. Kaiser Family Foundation, Menlo Park, Calif., and the Health Research and Educational Trust, Washington, have published data supporting that conclusion in a summary of results from a 2006 health benefits survey that drew on responses from over 2,000 employers with 3 or more employees.

This is the first year the researchers have included “high-deductible health plan with a savings option” as a coverage category.

Plans that incorporate health savings accounts, health reimbursement arrangements or other personal health accounts now seem to be covering about 4% of all U.S. workers with private employer-sponsored health coverage, the Kaiser researchers report.

The traditional indemnity health insurance plans that dominated the market up until the late 1980s now cover only 3% of U.S. workers, about the same as in 2005, the researchers report.

The total cost of health benefits increased 7.7%, with an average increase of 8.8% for employers with 3 to 199 employees and an average increase of 7% for employers with 200 or more employees.

Costs at health account plans increased an average of 4.8% and costs at preferred provider organization plans increased an average of 7.3%. The health account plans and the PPO plans were the only ones with cost increases below the average for all plans, Kaiser reports.

The average annual cost for all forms of coverage is $4,242 per single employee and $11,480 for a family of 4, Kaiser reports.

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Annual costs for ordinary health maintenance organization plans, preferred provider organization plans and point-of-service plans range from $4,000 to $4,400 for single employees and from $11,100 to $11,800 for families.

The annual cost of health account plans is about $3,400 for single employees and about $9,500 for families.

Researchers in the Stamford, Conn., office of Towers Perrin Inc. came up with similar figures when they surveyed 170 large U.S. employers with a total of 3.5 million U.S. employees about anticipated 2007 health and dental benefits costs.

The employers that participated in the Towers Perrin survey are expecting their average costs to increase 6.3% for active employees, to $4,392 for single workers and $12,948 for families.

Kaiser figures show that covered single workers paid about 16% of premium costs in 2005 and are continuing to pay 16% of the premiums this year.

Families are paying 27% of the premiums this year, up from 26% in 2005, the Kaiser researchers report.

Only 6% of the employers in the Kaiser survey said they were “very likely” to offer health account plans in the coming year, but the idea of offering them was far more popular with current health plan sponsors than the idea of eliminating employees’ coverage: Only 2% of the participants said they are very likely to drop coverage or restrict access in the coming year.