Right now, health insurance brokers, insurers and policy experts are in roughly the same position they were in a year ago: looking to see whether health savings accounts, health reimbursement arrangements and other personal health accounts will transform the health finance landscape.
Last year, benefits consultants were wondering whether HSAs would be to 2005 what health maintenance organizations were to 1995.
For 2005, the answer appears to be "no."
Although the benefits arm of Fidelity Investments, Boston, which handles large employers, says 3.9% of its clients' health plan members have "consumer-driven health plans" that incorporate HSAs or HRAs, only 1.4% of 1,204 consumers who participated in a recent survey commissioned by the Employee Benefit Research Institute, Washington, and The Commonwealth Fund, New York, had CDHP coverage.
Although many employers wanted to talk about CDHPs this past year, fewer than 25% of group health clients seriously considered the plans, and fewer than 5% adopted them, says Kevin Roller, president of Roller Consulting Company, Conshohocken, Pa.
From employers' perspective, "there's a lack of quality information demonstrating that this is a win-win situation for everyone," Roller says.
Nathaniel Brinn, CEO of HSA Bank, Sheboygan, Wis., a unit of Webster Financial Corp., Waterbury, Conn., says he sees large and midsize companies starting to dip their toes in the HSA water. In 2007, "we think the large companies will start to get more aggressive," Brinn predicts.
Other Trends To Watch
Here are some other health coverage products, trends and issues to watch in 2006.
1. Efforts to improve the first-generation CDHPs. Brinn expects to see consumers and employers demand knowledgeable customer service from the banks that handle health account custody services, not just the basic ability to store and protect cash.
Other experts are hoping to see CDHPs develop better, detailed health care price and quality databases for consumers, along with enough CDHP performance data to show whether the programs really are improving the cost and quality of health care.
In December 2005, for example, the researchers who analyzed the EBRI/Commonwealth Fund survey data found that consumers who had high-deductible health coverage, either with or without personal health accounts, were far more likely than other privately insured consumers to talk to doctors about health care costs and to ask for prescriptions for cheaper drugs. But only 12% of the high-deductible coverage holders said their health plans provided hospital cost information, while 15% of the members of traditional plans said their plans provided such data.
Earlier, authors of a study published in the journal Health Affairs in November gave several CDHPs that incorporate HSAs or HRAs an average grade of F for the quality and quantity of their health care provider cost information.
Aetna Inc., Hartford, and CIGNA Corp., Philadelphia, are examples of carriers that are starting to put provider-specific price information on the web.
Meanwhile, employers are looking for conclusive evidence that shifting to CDHPs will lead to enough premium savings to justify a radical shift in plan design.
Destiny Health, Chicago, a unit of Discovery Health Ltd., Sandton, South Africa, is an example of an account-based health plan company that has been in the market since 2000.
Destiny figures show that, over the course of 24 months, a typical employer customer sees the share of prescriptions referring to generic drugs increase about 50%, according to Stuart Slutzky, a Destiny vice president. "That has a pretty dramatic effect on costs," he says.
Health coverage rate increases are about five percentage points lower at a Destiny plan than a conventional plan, Slutzky estimates.
At HSA Bank, Brinn says he would like to see Congress tinker with the HSA program rules to raise the maximum HSA contribution limit, which now stands at $5,400 for a family.
