High-deductible health plans growing
The employer market is moving toward more consumer-driven plans. Will that translate into lower health spending?
High-deductible plans are gaining market share.Skip to next paragraph
Donald B. Marron is director of economic policy initiatives at the Urban Institute. He previously served as a member of the President's Council of Economic Advisers and as acting director of the Congressional Budget Office.
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Here’s another important fact from the Kaiser Family Foundation’s recent survey of the employer health insurance market. Health insurance plans with high deductibles and a saving option (HDHP/SO) have been gaining market share rapidly. Only 1-in-25 enrollees were in such plans in 2006; today that figure is more than 1-in-6.
The increased popularity of these plans–which involve Health Savings Accounts (HSAs, created by the 2003 tax law) or Health Reimbursement Arrangements (HRAs)–has come at the expense of health maintenance organizations (HMOs, down from 21% in 2005 to 17% in 2011), preferred provider organizations (PPOs, down from 61% to 55%), and point-of-service plans (POS, an unfortunate acronym, down from 15% to 10%).
When paired with HDHPs, HSAs and HRAs are often called consumer-driven health plans because they give the patient / consumer more direct responsibility for health spending. In return for lower premiums, beneficiaries face higher cost-sharing. To help cover those out-of-pocket costs, beneficiaries make contributions to tax-advantaged saving accounts
Bottom line: The employer market is moving toward more consumer-driven plans. Big question: Will translate into lower health spending?
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