The study by the National Business Group on Health and Watson Wyatt Worldwide found that CDHP enrollment will skyrocket to 478,000 in 2004, up from 169,000 in 2003. Nearly one-third (32%) of large companies expect to offer a CDHP to workers next year, compared to 21% that do so now. However, few employers offer them as the only option to their employees.
“We continue to hear from employers that they need to get their workers to take greater responsibility for making health care decisions if they are to be successful at reducing health care costs,” said Helen Darling, president of the National Business Group on Health, an association of 203 public and private-sector employers, in a news release.
CDHPs allow employers to give their workers greater flexibility in making decisions about their health care benefits coverage. Most plans include cost-sharing provisions, high deductibles, a health reimbursement account (HRA) or health savings account (HSA), and tools and resources to help workers become smarter health care consumers.
In fact, according to the study, the establishment of HSAs under the new Medicare law should also contribute to the implementation of high-deductible health plans. HSAs can be paired with high-deductible health plans to encourage employees to become more price-sensitive when purchasing health care.
“With no apparent end to rising health care benefit costs on the horizon, employers have been aggressively looking at new ways of controlling costs,” said Ted Chien, global director of group benefits and health care consulting at Watson Wyatt, in the news release. “Consumer-directed health plans appear to be drawing the most attention, as many employers believe they must increase individual accountability in order to put the brakes on rising costs.”
Although costs are primarily driving increased interest in consumer-directed health plans, employers cited various reasons for implementing a plan. One out of four (24%) respondents cited their confidence that a CDHP would reduce overall health plan costs as their primary reason for offering a plan. Slightly fewer (22%) said increasing employees’ price sensitivity to health care decisions led them to implement a plan.
Most employers (76%) who offer a plan said employee enrollment in the first year of the program was either at or above the expected level. The remaining quarter experienced lower than expected enrollment levels. However, first-year enrollment levels, ranging from 1% to a high of 33%, were low relative to enrollment in traditional plans. The survey found that how well the plan was communicated was a primary determinant of enrollment levels. “Clearly, employers can introduce these plans with greater success if they communicate them effectively,” said Darling.
A total of 159 large companies and nine primary health plans providing consumer-directed health plans participated in the survey.