The promise of lowering healthcare spending through health savings accounts and other consumer-driven medical payment methods hasnt come to fruition, at least not yet, as most consumers and employers remain wary of the high deductibles and risk involved, recent surveys show. But some predict further adoption as costs of traditional plans keep rising.
Aspects of consumer-driven plans also are bleeding into the traditional insurance market as insurers seek to make all consumers, no matter their plan design, more accountable for their healthcare spending.
This broader trend toward consumerism, where patients are more involved in their healthcare spending, is being driven by unrelenting cost increases to healthcare, says Jeff Munn, principal and leader of the Design and Development Group at consulting firm Hewitt Associates. The theory is that if consumers have to pay for services out of their own pocket, they will spend more wisely, and perhaps less.
Theres this broader notion of consumerism that says that for way too long healthcare has been about paying $10 when you go to the doctor and having no idea what those services cost, Munn says. Today, deductibles are going up, copayments are going up, and not only are people thinking about prices when they go to the doctor, but they have more information than ever before about how much things cost.
HSAs and their cousin, health reimbursement arrangements, or HRAsfunds set aside to reimburse individuals for medical expenseshave long been touted by President Bush and others as a way to ultimately reduce healthcare costs and make healthcare more efficient.
But two studies released this fall indicate that employers and workers have been slow to adopt HSAs and other consumer-driven plans. These plans cover about 5% of all insured workers in 2007, which is not statistically different from the 4% market share the previous year. An estimated 3.8 million workers are enrolled in consumer-driven plans nationwide, almost equally divided between HSAs and HRAs, according to the Kaiser Family Foundations annual employer benefits survey, released in September. Looking toward 2008, the foundation found that few firms that dont already offer these plans said they are very likely to add an HRA plan (just 3%) or an HSA-qualified plan (2%).
Hewitt Associates, in a survey of large employers released Sept. 24, reported that while 20% of employers surveyed offered consumer-driven plans, just 3% of workers chose them. However, companies surveyed anticipate that enrollment will grow to 20% in five years. These plans are somewhat complicated, and its takes some effort to explain them, says Gary Claxton, a Kaiser Family Foundation vice president and co-author of the benefits survey. Some employers are just trying to get these started and see how employees like them and not make a big deal out if it.
But some critics, such as the National Business Coalition on Health, a national not-for-profit coalition of employer-based healthcare groups, say that in their current design, consumer-driven plans put too much responsibility on individuals to make complex care decisions. The coalition also fears their widespread use could lead to lower employee productivity and higher costs in the long run if employees forgo care out of fear they cannot afford it.
Its unlikely that a Democratic-controlled Congress will support further expansion of consumer-driven plans anytime soon, Claxton says. In late December 2006, Congress passed a small expansion, allowing a one-time rollover of individual retirement account assets to be used to fund one years maximum HSA contribution.
Now we are in a holding pattern where you are not going to see action in Congress to help make these more popular, Claxton says.
In the meantime, insurers are tinkering with consumer-driven plans around the edges, and embracing the notion of consumerism in healthcare purchasing. Health Net rolled out a hybrid consumer-driven plan in California in July that combines an HMO and a zero deductible with an HRA. Called Optimizer HMO, the plan allows members to choose from six HMO options, while requiring a contribution of, on average, $500 to an HRA. Individuals have access to online tools, as well as an HRA debit card through the Bank of America.
The insurer says the Optimizer HMO allows employers and consumers to dip their toes into the consumer-driven market without the risk of a high deductible. Health Net will put $100 into the individuals HRA as a reward for taking a wellness survey or participating in a health coaching session, says Wendell Gurley, vice president of product development for Health Net. Its also a way to reach consumers in California, which has a strong HMO tradition. So far, just four employers have signed up, but the product is getting a strong response, Gurley says. The idea is to optimize healthcare purchasing decisions without jumping all the way to a $1,500 or $3,000 deductible, Gurley says.