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PPOs Lose Ground To HMOs And Health Account Plans

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Preferred provider organization plans may have suffered a loss of market share between 2006 and 2007.

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 survey of about 3,100 public and private employers with 3 or more employees.

This is the second year in which 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 5% of all U.S. workers with private employer-sponsored health coverage, up from 4% in 2006, the Kaiser researchers report.

The percentage of workers enrolled in health maintenance organization plans crept up to 21%, from 20%, and the percentage enrolled in PPO plans fell to 57%, from 60%.

PPOs’ share of group health enrollment peaked at 61% in 2006.

The total cost of health benefits increased 6.1%, down from an increase of 7.7% in 2006.

But the 2007 increase is still more than twice as high as the rate of increase in the overall U.S. urban Consumer Price Index, which is up only 2.6% this year, the Kaiser researchers report.

The average annual cost for all forms of coverage is $4,479 per single employee and $12,106 for a family of 4.

Annual costs for ordinary health maintenance organization plans, preferred provider organization plans and point-of-service plans range from about $4,300 to about $4,650 for single employees and from $11,600 to $12,500 for families, the researchers report.

The annual cost of health account plan coverage is $3,869 for single employees and $10,693 for families.

About 5% of the employers in the Kaiser survey said they are “very likely” to offer health account plans in the coming year, down from 6% in 2006.

Fewer than 1% of the participating employers now offering health benefits said they are very likely to drop coverage or restrict access in the coming year. That percentage is down from 2% in 2006.


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