CDHP Prevalence Grew In 2012; Reduces Office Visits, Prescriptions

Consumer-driven health plans (CDHPs) were the only type of health insurance plan that grew in 2012, according to recent research from the American Association of Preferred Provider Organizations (AAPPO). Another study, from the Employee Benefit Research Institute, found that CDHPs have been shown to reduce the long-term use of outpatient physician visits and prescription drugs.

The AAPPO estimates that 39 million individuals were enrolled in CDHPs in 2012, up from 33 million in 2011, a growth rate of 19 percent. The CDHP growth rate is even higher among large employers (those with 500 or more employees): 36 percent of large employers offered CDHPs in 2012, up from 32 percent in 2011. Small employers (those with 10 to 499 employees) are somewhat less likely to offer a CDHP (22 percent), but they are also more likely to offer a CDHP as the only medical plan option. CDHPs are offered by 59 percent of the nation’s largest employers (those with 20,000 or more employees).

CDHPs include one of two types of employee accounts: health savings accounts (HSAs) and health reimbursement accounts (HRAs), noted the AAPPO. Plans with HSAs are the most common. In 2012, 27 percent of large employers offered an HSA-based CDHP and 11 percent offered an HRA-based CDHP. However, average employee enrollment is higher in plans with HRAs. When employees have a choice of medical plans, enrollment averages 40 percent for HRA-based plans and 27 percent for HSA-based plans. Enrollment levels in both plan types are rising as employees become more familiar with the models.

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EBRI Study

The EBRI research used data from two large employers—one that adopted an HSA plan for all of its employees in 2007, and another with no CDHP—and found that after four years under the HSA plan, there were 0.26 fewer physician office visits per enrollee per year and 0.85 fewer prescriptions filled, although there were 0.018 more emergency department visits (all of which are considered statistically significant). Additionally, the likelihood of receiving recommended cancer screenings was lower under the HSA plan after one year and, even after recovering somewhat in later years, still lower than baseline at the study’s conclusion.

The theory behind CDHPs is that as participants are exposed to a high deductible before insurance benefits are triggered, enrollees will be induced to make better health care use decisions, such as not going to an emergency department when a visit to a physician would suffice.

Although usually offered alongside more traditional health plan designs, CDHPs are slowly increasing as employers’ only health insurance offering, EBRI noted.

“The availability of CDHPs both as a choice and on a full-replacement basis is expected to continue to increase under the Patient Protection and Affordable Care Act,” noted Paul Fronstin, director of EBRI’s Health Research and Education Program. “Recent regulatory decisions related to employer contributions to health reimbursement arrangements and health savings accounts, combined with the excise tax on high-cost health plans that takes effect in 2018, make CDHPs more attractive to employers because they may keep costs below the threshold that triggers the tax. This emphasizes the importance of understanding the long-term implications of increased reliance on CDHPs for the use of health care services and spending.”

“Past studies of the impact of these programs on health services use have been limited by the potential for selection bias because enrollees were often given a choice between CDHPs and more traditional options,” explained Christopher Roebuck, president of health economics and policy consulting firm RxEconomics, an EBRI Fellow. “This meant that those who chose CDHPs might have fit a particular profile, making it difficult to discern the independent effects of the CDHP.”

“Given these findings, employers should consider providing periodic, ongoing communications to enrollees regarding services that are exempted from the deductible,” explained Martin J. Sepúlveda,, an IBM Fellow and vice president of health industries research for the IBM Corporation.

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