Who's Using It? | Consumer-Driven Health Care

While the consumer-driven health care concept has gained a recognizable benefits presence within the last three years, health providers have been working on these plans since 1998. By 2001 major insurers had joined the market (see Figure 1). The Federal Employees Health Benefits Plan (FEHBP) inclusion of several consumer-driven plans with HRAs in the open enrollment for the 2004 plan year and with HSAs in 2005 may provide a considerable boost for consumer-driven health care plans among other employers. With thousands of federal employees across the nation and with a reputation as an excellent plan with reasonable premiums and multiple options in most locations, the FEHBP may serve to "legitimize" the concept even among cautious health care purchasers.

 

Figure 1: Consumer-Driven Health Care Vendor Timeline

Viewed from late 2004, less than two years after the authorization for HRAs and only a few months after federal legislation was enacted boosting HSAs and high deductible plans, data are just beginning to be available. While these data offer some positive trends for consumer-driven health care plans, the data are not extensive enough to form a definitive analysis of their long-term effects. For example, most employers had already established and communicated their 2005 health benefit options before the tax-advantaged HSAs and requirements for the accompanying high deductible health plans were enacted into law.

Surveys conducted prior to the 2004 law's enactment of favorable consumer-driven health care features revealed considerable employer interest in consumer-driven health care, albeit with some skepticism. The broad-based Kaiser Family Foundation/Health Research and Educational Trust (KFF/HRET) 2004 Annual Survey of Employer Health Benefits shows 10 percent of employers offering a high deductible health plan option to employees, up from 5 percent in 2003. However, only 3.5 percent of those firms offer a personal or health savings account option along with the high deductible health plan.

According to Deloitte Consulting's 2004 Consumer-Driven Health Care Survey, 19 percent of respondents already offer some type of consumer-driven health plan option, up from 11 percent in 2003. The 2004 KFF/HRET Survey also indicates 27 percent of employers say it is at least somewhat likely they will offer workers a high deductible health plan with a personal or health savings account option in the next two years. That appears consistent with results from Deloitte Consulting's survey, in which 29 percent of respondents said they are currently reviewing consumer-driven options and may offer one in the near future, and 14 percent report they will definitely be offering such a plan in 2005 or 2006. While the KFF/HRET Survey found larger companies are much more likely than smaller companies to be thinking about implementing a consumer-driven health plan option in the near future, this may be because 60 percent of firms with three to 199 workers, reported they were either "not too familiar" or "not at all familiar" with consumer-driven health care. As more consumer-driven health care plan products are marketed to small employers, those employers may embrace the concept.