Consumer-driven healthcare is not proving to be popular with Americans, with take-up rates and consumer satisfaction lagging behind more comprehensive healthcare plans, according to a study by the Employee Benefit Research Institute and the Commonwealth Fund. “Despite their tax benefits, consumer-driven health plans are not attracting large numbers of adults without insurance coverage, relative to other insurance,” said Karen Davis, Commonwealth Fund president. “New strategies are needed to provide affordable and meaningful insurance to the nation’s 47 million uninsured.”
The second annual EBRI-Commonwealth Fund Consumerism in Health Care Survey defined consumer-driven and high deductible healthcare plans as those involving a deductible of $1,000 or more for employee-only coverage and $2,000 or more for family coverage. Additionally, these plans feature either a health savings account that both the employer and the employee can contribute to, or a health reimbursement arrangement that can only be contributed to by the employer. Under these plans, employees can use money from these accounts to pay for medical expenses not covered by their health plans without any tax penalties.
Among the major findings of the survey is that the percentage of the U.S. population between the ages of 21 and 64 enrolled in a consumer-driven health plan remained unchanged at 1% between September 2005 and September 2006.
Another 7% of that population had plans with deductibles high enough to qualify for a health savings account, but had not established an account. According to the survey, this is because a large majority of them cannot afford to make any contributions. Roughly two-thirds of those who do have an HSA receive contributions to it from their employer, and nearly 20% do not make any contributions to the HSA with their own money.
Those with HSAs, according to the survey, spend far more of their money for healthcare, with 44% of those on consumer driven health plans saying they had spent 5% or more of their income on medical costs and premiums–roughly twice that of consumers in a comprehensive health plan.
Additionally, only 10% of those with an HSA were previously uninsured, compared to 20% for comprehensive coverage.
“Adults with health problems or with lower incomes bear the largest financial burdens associated with consumer-driven plans,” said Sara Collins, assistant vice president at the Commonwealth Fund and co-author of the report. “Two-thirds of people in consumer-driven plans with annual household incomes of under $50,000 are spending 5% or more of their income on medical expenses and premiums, and 2 in 5 are spending 10% or more.”
Part of the reason behind the lack of growth for CDHPs could be the lack of growth in awareness of consumer driven health plans. Just 20% of consumers taking part in the survey were at least somewhat familiar with CDHPs, and that number was virtually unchanged from a year ago.
While CDHPs are having trouble making inroads with the American public, they are having the desired effect on those enrolled. According to the survey, consumers who are enrolled in a CDHP are significantly more likely to consider costs when deciding whether to see a doctor or fill a prescription, to check the price of a service before receiving care or to ask their doctor for a less costly drug.
“It will be interesting to see if continually rising health care costs prompt more workers to conclude that the tradeoff of lower premiums for higher deductibles, and potentially higher out-of-pocket costs, is worth it,” said Dallas Salisbury, EBRI president and CEO. “The survey does find participants in consumer-driven health plans are more cost-conscious. Clearly, the choice becomes easier when some of the drawbacks of first-generation consumer-driven plans are removed, such as lack of protection for prevention and chronic care management within the deductible that may cause patients to delay or avoid getting needed care.”