Employers appear to be reaping savings in offering insurance plans linked to health savings accounts (HSAs) as part of their benefits package, a new study shows, but companies have yet to see their health insurance costs actually decline.
A separate report last month showed that workers who earn the least appear to be bearing a disproportionate share of their overall health care costs using such plans.
Employers with heavy enrollment in consumer-driven health plans have half the increase in health insurance premiums of those without, according to a new survey by the National Business Group on Health and Watson Wyatt Worldwide.
Authorized by the federal government in 2003, consumer-driven health plans (CDHP) allow employees to set aside earnings tax free in HSAs to pay for medical expenses, including doctor”™s office co-payments. In exchange, policyholders are forced to pay expenses for any specialist services up to a certain cap, in many cases between $1,500 and $2,000, but plans cover for expenses beyond that point.
The companies surveyed 450 of the largest U.S. companies that collectively employ more than 8 million people. Those companies spent an average of $7,200 on each employee”™s health plan in 2007, a figure that is expected to grow $400 this year.
Of those polled, 47 percent offer a CDHP, up from 37 percent in last year”™s survey. For next year, 54 percent indicated they will offer a plan.
Companies with at least half their work force enrolled in a CDHP had a 3.6 percent increase in health costs, compared to 6.2 percent at companies without such a plan.
Few companies have achieved that level of participation, however ”“ 15 percent of employees at the companies surveyed are enrolled in a CDHP, up from 10 percent last year.
The plans appear to change patient behavior, with a recent study by Blue Cross and Blue Shield showing that emergency room visits declined for members as they opted for doctor”™s visits under which their co-payments were covered.
The plans are not without criticism, however ”“ in March the Henry J. Kaiser Family Foundation published a Health Policy Alternatives report stating that a Medicare version of such plans appeared to be putting a higher deductible burden on families that already spend a large part of their income on health care costs. A separate Kaiser report in 2006 examining HSAs reached a similar conclusion.
“Beneficiaries with relatively high health expenses and more limited resources, however, could quickly exhaust their ”¦ accounts and be faced with thousands of dollars in out-of- pocket expenses in order to meet the deductible,” said Beth Fuchs, who authored the Health Policy Alternatives report.
In the meantime, insurance companies and brokers are actively marketing health-savings accounts. In early April Aetna Inc. announced it will sell businesses HSA-style plans through Chamber Insurance Trust, which sells insurance plans through 80 chambers of commerce in Connecticut.
Rapid innovation helped spawn near record merger activity in health care services last year, according to Irving Levin Associates, a Norwalk consultancy that tracks the sector.
“The jury is still out on whether health care can be successfully treated as a consumer (product),” said Stephen Monroe, a partner at Irving Levin. “The sluggish development of health savings accounts ”¦ suggests that people may have a limited tolerance for treating health care as a consumer good. However, we believe that this paradigm will be developed and tested to the fullest by a number of less-known health care services.”
