Consumer-Directed Health Plans to Cover 3.2 Million by January

December 21, 2004 ( - More than 3.2 million people are expected to be enrolled in some form of account-based consumer-directed health (CDH) plan on January 1, according to an Atlantic Information Services newsletter.

Inside Consumer Directed Care (ICDC) is reporting that of this total, the most popular form of CDH coverage are health reimbursement arrangements (HRA), with 2.6 million expected to be covered. This number has doubled since the start of 2004, and grown more than five times since the beginning of 2003.

High-deductible health plans (HDHP) are the second-most popular form of CDH, with 580,000 people expected to be covered as of January 1. ICDC estimates that that the number of these plans is expected to grow to more than 2 million by January 1, 2006. These plans will most often be combined with a health savings account (HSA); the total number of these, however, will not be known until the Internal Revenue Service calculates returns for 2004. The HSAs predecessor, the medical savings account (MSA), covered 250,000 people at its peak.

The top provider of HRA products is Definity Health, which covers more than 500,000 people. Definity was purchased by UnitedHealth Group for $300 million on December 10 (See UnitedHealth Buys Definity Health Corp. ). Definity clients include, Whirlpool Corp., Medtronics, and Sara Lee. Second in the ranking is Lumenos, a venture-capital-backed provider of HRA and HSA products, with 260,000 people covered. Following Lumenos is Aetna, Inc., with 205,000 members.

The ICDC data was calculated based on 60 national and regional insurers, CDH vendors and third-party administrators. The estimates do not include HSA- or HRA-based plans offered through the Federal Employees Health Benefits Program. For more information on ICDC, please see .