Study: Consumer Health Plans Not Living Up to Full Potential

The news release about Towers Perrin’s Study on Account-Based Health plans said the poll found that employers and employees were not reaping the health plans’ full rewards. But, more encouraging, the research also shows that when employees have a strong understanding of their consumer driven health plan and feel comfortable with the level of perceived financial risk associated with it, they better utilize the plan and its resources.

As compared to traditional health benefit plan participants, consumer health plan members are less comfortable with the level of financial risk their plan exposes them to, less likely to understand how the plan works, less favorable about how easy it is to use the plan, less favorable about the clarity of communication around benefit change and less satisfied with the basic elements of their plans – including access to affordable, quality health care.

According to the survey, while 29% try to reserve account money for future financial protection and 16% use the health plan to save for health care expenses, the majority of participants have yet to fully-appreciate the value of this opportunity.

Employees Still Comfortable

The long-term success of consumer health plans depends on more than the financial incentives implicit in the plan design and, while these plans have achieved some short-term cost savings, employees still lack competency, comfort, understanding and satisfaction with the plans, according to Towers Perrin.

This general lack of satisfaction, awareness and understanding around consumer health plans is a significant barrier to good long-term consumer behavior and positive change on the part of employees.

Failure – or even the suboptimal performance – of consumer health plans can have serious consequences for employees and employers alike. For employees it means that they would be prevented from experiencing the important benefits (such as accumulating money for retiree health care) associated with consumer health plans.

For employers, the mistrust that would be created has negative consequences for the company’s internal brand that go far beyond the benefit program in its effect on productivity. For example, 50% of consumer health plan members who are comfortable with their financial risk say that their health plan impacts their personal commitment and motivation to do a good job for the organization vs. 21% of consumer health plan members who are uncomfortable with their financial risk.

Research shows that employer-employee communication regarding consumer plans is the most significant issue impacting the success of consumer plans today. Conversely, the survey data shows consumer plan plan features have little bearing, positively or negatively, on how an employee perceives the plan.

This does not mean that plan structure is irrelevant but, before a plan’s structure can impact behavior, it must be properly understood.

To truly realize the benefits of consumer health plans, employers must:

• Be thoughtful and diligent in the design of the program.
• Gain and preserve employee trust by being realistic, transparent and employee-centered in communication.
• Disseminate benefit plan information more frequently and communicate beyond the open enrollment period.
• Address the emotional as well as the substantive issues of the consumer plan.
• Build employee confidence in their ability to manage their health, their health care and their finances by providing the necessary tools and resources.
• Work to increase employees’ health care time horizon beyond year-to-year, to a multi-year and, ultimately, a lifelong perspective.
• The result will be an employee population that understands their health benefit plan and is more confident, assertive and empowered to make smarter health decisions.

The survey was created to determine which design and operational elements best deliver on their promise to make employees smarter health care consumers. One thousand employees, who are either currently enrolled in consumer health plans or have an consumer health plans as an option but chose a traditional plan, were polled earlier this year to analyze their self-reported perceptions around plan design best practices, tool and resource availability, and employer communication efforts.