Offering what are called high-deductible health plans can decrease overall health care spend for employers and can help certain participants save on health insurance costs.
But, paying for health care as it is used versus paying more upfront via payroll deduction can catch some people off guard. Two-thirds (63%) of employees enrolled in a traditional health plan were extremely or very satisfied with their overall health plan, compared with 44% of HDHP enrollees, according to the Employee Benefit Research Institute/Greenwald Research “Consumer Engagement in Health Care Survey.”
EBRI notes that part of the difference in satisfaction appears to be due to out-of-pocket spending for prescription drugs and medical services. Sixty percent of traditional plan enrollees were satisfied with the cost they pay for prescription drugs, and 52% were satisfied with the cost they pay for other health care services. In contrast, only 39% of HDHP enrollees were satisfied with what they pay for prescription drugs, and only 27% were satisfied with the cost they pay for other health care services.
However, satisfaction levels among HDHP enrollees almost double when tenure with their health plan goes from less than one year to three or more years. The percentage reporting that they are extremely or very satisfied with their HDHP increases from 30% to 54%. In contrast, among traditional plan enrollees, satisfaction increases from 60% to 66%.
Paul Fronstin, director of the Health Research and Education Program at EBRI, notes that statistics show 20% of the population use 80% of health care, meaning 80% only use 20% of health care. “When you consider that, most people would be better off with an HDHP,” he says. “They might not be happy with out-of-pocket costs at first, but after some years, they realize it’s not bad because they don’t use a lot of health care.”
Fronstin says more and better education about HDHPs can help with satisfaction levels. “It depends on how [plan sponsors] roll out the HDHP,” he says.
He gives an example of a company that might offer a traditional plan with employee premiums of $2,400 per year versus an HDHP with a $2,400 deductible and no out-of-pocket costs after that. Employers need to explain with examples that the traditional plan will cost $2,400 whether an employee uses health care or not, but the HDHP might cost less if the employee doesn’t use enough health care to meet the deductible.
“But some people still won’t get it,” Fronstin says. “It will be a problem if the agent [or whoever is talking to employees about benefits] spends little time on details and doesn’t bring it down to the participant level.”
Fronstin says offering a health savings account with an HDHP will also improve participant satisfaction levels, especially if employers contribute to the HSA. He notes that often employer HSA contributions are put into the accounts per paycheck and therefore not all of the contribution is available up front at the beginning of the year as with a flexible spending account. However, he also points out that employers could put all their contributions in at the beginning of the year. It will also help, in part, if employees know to plan ahead to have the money available when health care is used.
“To the degree we could provide quality information about doctors and hospitals, that would be useful and help people make better decisions about health care,” Fronstin adds. “The marketplace is improving as far as getting information to consumers.”
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