In 2005, less than five percent of employers offered consumer-driven plans.' Last year between 12 and 15 percent did.' More large firms are in the game now---22 percent made them available in 2008; 28 percent did in 2009.' Many employers have gone to a 'total replacement strategy.' In insurance jargon that means workers don't have a choice of plans as they once did.' It's now a take-it-or-leave-it deal.' No more HMOs or PPOs.' That's oh so ironic given all the flag-waving from politicos and advocacy groups about choice in health care.' There's no choice after all.
'It shouldn't be a surprise we've seen enrollment growth as employers are desperate to do something about health care costs, and this is an alternative they are promoting,' says Paul Fronstin, a senior research associate at EBRI.' Eleven percent of those with private insurance or about nineteen million people had consumer-driven plans in 2009.' Some ten million have health savings accounts which allow them to set aside money tax-free to pay for the high deductibles and other medical expenses. Fronstin is right'it's the attraction of lower premiums. EBRI found that on average workers paid about 20 percent of the premium for a consumer-driven plan compared to 23 percent for an HMO and 24 percent for a PPO.' (Typically employers and employees share the costs.)
These plans have a long history, growing out of ideas pushed by conservative think tanks over the last two decades as a way to make patients more responsible for the costs of their' care.' The theory was that if consumers had to think twice about spending their own money for medical services, they might not use as much of it.' Voila! The national tab for medical expenditures would plummet because consumers wouldn't be going to the doctor as often.' A gradual series of legislative changes made them a respectable if not a dubious proposition for many people, especially those who have chronic illnesses.
In some ways, consumer-driven plans are a pact with the devil. Yes, premiums may be lower up front, so they appeal to the young and the healthy.' But you're taking a gamble.' If you become seriously ill or have lots of medical expenses associated with a chronic illness, say, diabetes which means you go to the doctor often, you may quickly blow through any money in the savings account and must pay out-of-pocket until you've paid the deductible, and insurance actually kicks in.
And that brings me to another part of the story.' Americans are cutting back on visits to the doctor.' Does that mean consumer-driven plans doing what their supporters had hoped'discouraging consumers from seeking care they need it?' 'People just aren't using health care like they have,' said Wayne DeVeydt, WellPoint's chief financial officer.' 'Utilization is lower than we expected, and it's unusual.'
No one knows for sure whether it's because of the recession, loss of COBRA benefits , or lack of coverage under their consumer-driven health plan while patients satisfy their high deductibles. If it's the latter, there's another irony here. Health reform was supposed to ensure that people got the care they needed.' Consumer-driven plans may result in just the opposite.