Nearly One-Third of All Workers Now in Consumer-Driven Health Plans

The Kaiser Family Foundation recently released its annual survey of employer health plans. This is the “Big Daddy” of all of the employer surveys. It has been conducted under a variety of sponsors for over 20 years and is as comprehensive as any survey could be.

The Kaiser Family Foundation recently released its annual survey of employer health plans. This is the “Big Daddy” of all of the employer surveys. It has been conducted under a variety of sponsors for over 20 years and is as comprehensive as any survey could be.

This one finds a remarkable continuation of the private market’s conversion to consumer-driven health plans. Thirty-one percent of all covered workers now have an individual deductible of at least $1,000. This is up from 27% just one year ago and 10% in 2006. Twelve percent now have deductibles of $2,000 or more.

More than half of these workers (17%) also have a savings option: 8% have a Health Reimbursement Account (HRA) and 9% have a Health Savings Account (HSA). According to this survey, HSA enrollment grew by 50% in the past year (up from 6% of the work force in 2010.)

The reason for the surge in HSA enrollment is pretty clear — money. Total family premiums for HSA-qualified coverage are $12,685 versus $15,363 for non-CD health plans, and employee contributions to premium are nearly $1,200 less ($3,076 vs. $4,234.) Plus, on average employers contribute $1,069 to the family’s HSA. These savings go a long way to filling the employee’s deductible obligation.

A couple of notes on all this:

1. The survey does not track HRAs that have less than a $1,000 deductible, even though those, too, should be considered “consumer-driven.” The point of consumer-drive health is to give people financial incentives to be cautious in their spending and allow people to have more control over their own health care decisions. A higher deductible is a good way to do that, but not the only way. Many employers use HRAs when they want to maintain coverage for some services below the deductible, such as prescription drug co-pay programs. These designs still empower consumers to be wise shoppers.
2.  Similarly, I consider a high deductible without a savings option as part of the consumer-driven health universe. A tax-favored savings account is only attractive if one pays income taxes, and nearly half the population does not. Even without an official account, these workers still benefit from lower premiums and those savings may still be used for the direct payment of services.

I spend a lot of my time in my blog posts discussing what the so-called “research community” has been doing over the years. It is astounding to me that these researchers continue to virtually ignore the transformation in health care financing that is happening under their noses. They all opposed consumer driven health for political reasons, and now they seem to resent that it is happening despite their disapproval. Maybe they are hoping it will all just go away.