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High-Deductible Health Plans Still Make up Small Share of Market, But Acceptance Could Grow

Volume 29, Issue 514                                          April 28, 2008

Anna C. Spencer

While consumer-directed health plans (CDHPs) are being offered by a growing number of employers, enrollment in these products constituted just 5 percent of total enrollment in employer-sponsored health plans in 2007 (see below), according to a recent report from the Center for Studying Health System Change.

An annual employee benefits survey reports by the consultant group Cowden Associates, found that more than half of enrollees in a high-deductible plan were unhappy with the out-of-pocket costs. “The dissatisfaction level was the real eye-opener," Vince Wolf, executive vice president of Cowden Associates, told the Post-Gazette.

Similarly, a new study from the Kaiser Family Foundation found that only a fairly small number of families have sufficient assets to cover cost-sharing in consumer-directed health plans.  Most uninsured households do not have overall financial assets large enough to cover the HSA deductible if they get sick. For example, about one-third (33 percent) of households with at least two uninsured members had gross financial assets of at least $2,000, the minimum deductible for an HSA-qualified family plan in 2004, and only 9 percent had enough of these assets to cover the out-of-pocket maximum ($10,000). These families may have other financial obligations to meet as well, the study noted.

Still, health plans and benefits consultants predict more employers will offer these products in the future as momentum strengthens for greater consumer engagement in health care. According to the Health System Change report, many large employers are engaged in “watchful waiting,” and the report authors predict that as employees become more comfortable with the CDHPs, eventually more traditional health plans will be dropped or restructured to favor the choice of an CDHP. They also are hoping to learn from the experiences of the few large employers that have replaced all benefit options with CDHPs.

© Copyright 2008, State Health Notes