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The Care and Feeding of Consumer-Driven Health Plans

Employers like CDHPs because these plans help them slash the cost of providing medical benefits. When used well, consumer-driven health plans help individuals and families get better healthcare while reducing the cost of medical insurance. Here’s how to help your employees use their benefits well. 

Health Savings Accounts (HSAs) provide consumers incentives to manage their own healthcare costs by coupling a tax-favored savings account used to pay medical expenses with a high-deductible consumer-driven health plan (CDHP) that meets certain requirements for deductibles and out-of-pocket expense limits.  

Most CDHPs cover preventive care services, such as routine medical exams, immunizations and well-baby visits, without requiring the enrollee to first meet the deductible. And best of all for the employee, he or she owns the funds in the HSA, which can be rolled over from year to year. 

When used well, CDHPs help individuals and families get better healthcare while reducing the cost of medical insurance. And employers like CDHPs because these plans help them slash the cost of providing medical benefits. 

Not surprisingly, CDHP adoption is on the rise. Nationally, 19 percent of large employers are currently offering CDHP/HSA plan arrangements, according to the BlueCross BlueShield Association. That is up from 10 percent just two years ago. 

Use with Care 

But lack of knowledge and fear of costs may be keeping employees from getting the medical care they deserve, even if it’s available to them.

The findings of an AcademyHealth research study indicate that enrollment in CDHPs resulted in a reduction of office visits in the first year of enrollment. These reductions in care appear to be indiscriminate, with patients cutting back on both high- and low-priority visits. And the lower the education and income of the employee, the greater the reduction on high- and low-priority visits. 

In the study, about 10 percent of individuals indicated that they had postponed or delayed receiving medical care to save money, and 18 percent indicated that they did not go to a physician when they should have, to save money.  

The researchers also found that after the introduction of CDHPs, individuals enrolled in the high-deductible CDHP were significantly more likely to discontinue taking antihypertensives (blood pressure medications) and lipid-lowering drugs. 

Another study funded by the Robert Wood Johnson Foundation concluded that when consumers are put into CDHPs, they don’t cut back on wasteful services, but instead cut back randomly. 

It’s easy to understand why from the employee’s point of view; these plans carry with them the unknown cost of the doctor’s office visit and prescriptions afterward. 

Fighting Back 

It doesn’t have to be this way. Here are a few easy and cost-effective steps you can take to help your employees get the most out of their CDHPs: 

  • Eliminate potential disincentives to employees.
  • Reduce or eliminate co-payments for certain conditions/therapies.
  • Customize plan design for targeted population segments based on clinical evidence.
  • Integrate with wellness and disease management programs. 

Focus on the long term – not the next few months.  Educate and inform:  

  • Provide clear explanations of your programs and their benefits.
  • Offer on-demand access to education, advice and information.
  • Use multimedia: face-to-face, print, online modeling tools, phone and Web resources to educate plan members.
  • Ensure real-time account visibility and access.
  • Create a single access point for all accounts. 

Make it accessible: 

  • Offer a choice of convenient payment options.
  • Arrange for convenient prepaid payment cards.
  • Offer transactional capabilities that enable direct provider payment or direct deposit reimbursement.
  • Provide access to live and expert customer service, by email or phone.Bottom Line: HSAs and CDHPs offer advantages for employers and employees alike. Ensure that your employees are getting the most from their plans with a strategy of design, education and access.   

Enrollment & Coverage Trends

  • The number of people with HSA/CDHP coverage rose to eight million in January 2009, up from 6.1 million in January 2008, 4.5 million in January 2007, and 3.2 million in January 2006.
  • Between January 2008 and January 2009, the fastest growing market for HSA/CDHP products was large-group coverage, which rose by approximately 35 percent, followed by small-group coverage, which rose 34 percent.
  • In two market segments – individual and large-group – over 85 percent of enrollees in HSA/CDHP plans were in preferred provider organization (PPO) products.
  • Approximately 76 percent of enrollees in small-group HSA/CDHP plans were in PPO plans.
  • Overall, PPOs (83 percent) and health maintenance organizations (HMOs) (10 percent) were the most popular CDHP types.

Source: Center for Policy and Research, America’s Health Insurance Plans