Long-Term Prospects for Consumer-Driven Plans Under Question

Low enrollment in high-deductible health plans with health savings accounts and low satisfaction among many enrollees in the plans have raised the "question of whether consumer-directed plans will stall before they ever hit the mainstream," the Wall Street Journal reports.

Data indicate that the eight million to 10 million enrollees in consumer-directed health plans spend less on medical care than enrollees in traditional health plans, a result that "is encouraging more employers to introduce such plans to their workers over the next two years," according to the Journal.

According to a survey by the Kaiser Family Foundation and Health Research and Educational Trust, enrollment in consumer-directed health plans sponsored by employers, when dependents and companies with fewer than three employees are excluded, was 2.7 million in 2006, compared with 2.4 million in 2005. Nineteen percent of employees who have a choice between consumer-directed health plans and traditional plans select consumer-directed plans, according to Kaiser/HRET.

The Federal Employees Health Benefits Programhas offered consumer-directed health plans for several years, but only about 50,000 of eight million members had enrolled in the plans as of last year, according to health insurance industry estimates. In addition, enrollees in consumer-directed health plans "often report lower satisfaction and confusion about how the plans are supposed to work," the Journal reports.

Employee benefits company Towers Perrin last month published a survey that found many enrollees in consumer-directed health plans believe they have less ability to find high-quality health care providers than enrollees in traditional plans. In addition, the survey found that only 29% of enrollees in consumer-directed health plans attempted to save funds in their HSAs for future medical expenses.

According to the Journal, one "reason for the frustration is the uphill battle that many consumers describe in trying to shop for their health care."

David Guilmette, managing director of the health care consulting practice at Towers Perrin, said, "If I were a product manager in any other industry and saw scores this low in customer satisfaction and understanding, I'd be thinking of pulling that product from the shelves or retooling it."

However, supporters of consumer-directed health plans said that enrollment in the plans has increased at a faster rate than enrollment in HMOs when those plans first entered the market in the 1970s. In addition, most enrollees in consumer-directed health plans do not switch to traditional plans, according to supporters.

Larry Boress, president of the Midwest Business Group on Health, said that most employers that offer consumer-directed health plans "still do not have the time, effort or resources" to teach employees to use the plans effectively. According to the Journal, an increased number of health insurance industry experts have said that consumer-directed health plans "to succeed" must provide "coverage that is at least as rich as traditional plans."

Bill Sharon, a senior vice president at the human resources consulting division of Aon, said, "If you're just trying to cost shift, and you only get 10% of your employees in, they are the youngest and healthiest, and you haven't accomplished anything in terms of health care costs" (Fuhrmans, Wall Street Journal, 6/12).