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Washington, D.C., December 7, 2006—Americans have not yet warmed to consumer-driven health plans, a relatively new kind of coverage that offers reduced premiums but carries higher annual deductibles. Enrollment in consumer-driven plans remains low, and satisfaction continues to lag when compared with more comprehensive health insurance, according to a survey released today by the Employee Benefit Research Institute (EBRI) and The Commonwealth Fund, nonpartisan organizations.
The second annual EBRI–Commonwealth Fund Consumerism in Health Care Survey also finds that, despite the expectations of some policymakers that the lower premiums and tax benefits of consumer-driven health plans (CDHPs) would substantially reduce the number of people without health insurance, adults in these plans were no more likely to have been uninsured before enrolling in their plans than are those with more comprehensive insurance coverage.
Dallas Salisbury, EBRI president and chief executive officer, said, "It will be interesting to see if continually rising health care costs prompt more workers to conclude that the tradeoff of lower premiums for higher deductibles, and potentially higher out-of-pocket costs, is worth it. The survey does find participants in consumer-driven health plans are more cost-conscious. Clearly, the choice becomes easier when some of the drawbacks of first-generation consumer-driven plans are removed, such as lack of protection for prevention and chronic care management within the deductible that may cause patients to delay or avoid getting needed care."
Karen Davis, Commonwealth Fund president, said, "Despite their tax benefits, consumer-driven health plans are not attracting large numbers of adults without insurance coverage, relative to other insurance. New strategies are needed to provide affordable and meaningful insurance to the nation's 47 million uninsured."
The survey defined consumer-driven and high-deductible plans as having deductibles of $1,000 or more for employee-only coverage and $2,000 or more for family coverage. According to the survey, consumer-driven plans also feature one of two kinds of tax-exempt savings accounts: health savings accounts (HSAs) and health reimbursement arrangements (HRAs). Employers and employees can contribute pre-tax income to HSAs, while only employers can contribute to HRAs. Employees can use money in the accounts, without tax penalty, to pay for medical expenses not covered by their health plans.
The survey, a nationally representative sample of individuals with consumer-driven and high-deductible health plans and more comprehensive health plans, found that:
Paul Fronstin, senior research associate at EBRI and lead author of the report, said, "The survey findings reveal that adults in all plan types are searching for information on the cost and quality of providers. A majority of privately insured adults in all plans view the provision of such information as a priority for the health system."
Sara Collins, assistant vice president at The Commonwealth Fund and co-author of the report, said, "Adults with health problems or with lower incomes bear the largest financial burdens associated with consumer-driven plans. Two-thirds of people in consumer driven plans with annual household incomes of under $50,000 are spending 5 percent or more of their income on medical expenses and premiums and 2 in 5 are spending 10 percent or more."
Consumer-driven plans remain largely unknown to most Americans, the survey found. Nationally, just 1 in 5 consumers in this year's survey was at least somewhat familiar with CDHPs, unchanged from 2005. Additional findings include:
The survey of 3,158 U.S. adults ages 21–64 was conducted Sept. 1–19, 2006, through a 14-minute Internet survey. The base sample was drawn randomly from Synovate's online sample of 1.5 million Internet users who have agreed to participate in research surveys, and was complemented with a randomly drawn over-sample of adults in consumer-driven health plans and in health plans with deductibles high enough to meet the threshold for a health savings account but who do not have an account. The final sample included 722 adults in consumer-driven health plans, 930 adults in high-deductible health plans, and 1,506 adults in more comprehensive plans, or those with lower or no deductibles. Details about the survey methodology are available in the full study.
EBRI is a private, nonprofit research institute based in Washington, D.C., that focuses on health, savings, retirement, and economic security issues. EBRI does not lobby and does not take policy positions. The Commonwealth Fund is a private foundation that aims to promote a high-performing health care system by supporting independent research on health care issues.