Health Insurance Daily

Consumer-Driven Health Shifts Into Higher Gear

Now that early adopters have blazed the trail into consumer-driven health plans, the movement is gaining momentum, according to year-end figures from Mercer Human Resources Consulting.

Businesses of 20,000 or more employees jumped from 12% CDHP adoption in 2004 to 22% in 2005. About 19% of businesses with 10,000 to 19,999 workers and 10% of those with 5,000 to 9,999 employees had adopted a CDHP for 2005.

The cost of CDHP coverage in 2005 averaged $5,480 per employee, including employer contributions to HRA and HSA accounts, compared to $6,518 spent per employee under a PPO, Mercer reports. The median amount for employee contributions was $57 per month for single coverage and $206 per month for families, as compared to $78 and $290, respectively, for the same coverage under a PPO.

HRAs appear to be cheaper than HSAs for most patients. HSAs carried a median deductible of $1,200, but employers contributed a median of only $100. For HRAs, the median employer contribution was $750, and the median deductible was $1,250.

Meanwhile, A Cigna HealthCare analysis of 42,200 first-time users of consumer-driven health plans finds that these consumers generated an 8% reduction in medical costs. The CDHP-users showed a significant increase in usage of medications to control diabetes, asthma and high cholesterol, but the cost per day for the medications decreased, suggesting that CDHP-users made more cost-effective decisions, but did not skip medications.

Article published by BenefitNews.com

posted by Mike @ 8:45 AM