More Employers Moving to High-Deductible Health Plans

By Karen Pallarito

HealthDay Reporter

FRIDAY, Aug. 15, 2014 (HealthDay News) -- Many Americans with job-based health insurance will face costlier deductibles next year as more large employers embrace or expand so-called consumer-directed health plans, a new survey finds.

The shift to high-deductible, consumer-directed health plans is occurring as Fortune 500 companies and large public-sector employers grapple with rising health-care and insurance costs.

"Employers are looking to put their employees in the driver's seat" to help manage costs together, Brian Marcotte, president and CEO of the National Business Group on Health, said during a media briefing this week detailing the survey's results.

Consumer-directed health plans feature high deductibles and low monthly premiums. These plans are typically paired with a health savings account to help employees and their dependents pay out-of-pocket medical expenses.

"The idea is that consumers will use fewer services and become more prudent purchasers since they bear more financial responsibility for their consumption," said Caroline Pearson, a vice president at Avalere Health, a Washington, D.C.-based research and consulting firm.

Large employers are projecting a 6.5 percent increase in health-care costs in 2015, according to the survey. That's slightly below the 7 percent increase employers had forecast for 2014, before adopting health plan design changes -- such as moving to consumer-directed plans -- and other cost containment measures.

Large employers said they hope to whittle next year's projected increase to 5 percent. That's about two-and-a-half times the annual U.S. inflation rate, which stood at 2.1 percent through the end of June.

Expensive medical claims, chronic diseases such as heart disease and cancer, as well as overall medical inflation are the main drivers of rising health costs, employers said in the survey.

"If you're a large company that spends a half a billion dollars on health-care costs, a 5 percent increase is $25 million," Marcotte said.

Consumer cost-sharing is also likely to rise by 5 percent in 2015, he said.

Along with shifting to consumer-directed health plans, more employers surveyed said they'll encourage their health-plan participants to be better consumers and they'll add or expand wellness programs.

The National Business Group on Health, whose members provide benefits to 50 million U.S. employees, retirees and their families, surveyed 136 employers in June about anticipated health costs and plan design changes.

Eighty-one percent of large employers in the survey said they would offer at least one consumer-directed health plan in 2015, up from 72 percent in 2014.

One-third of employers (32 percent) said consumer-directed health plans are the only health plans they will offer in 2015. That's up from 22 percent this year.

While traditional "preferred provider organization" plans -- or PPOs -- remain the most common type of insurance offered by large employers, consumer-directed health plans are poised to eclipse the popularity of those traditional plans, the survey found.

The median consumer-directed health plan deductible will run approximately $3,000 for a family and $1,500 for an individual in 2015. That compares to a median PPO deductible of $1,168 for a family and $450 for an individual, according to the report.

Employee premium contributions -- on a percentage basis -- for both types of plans will remain roughly the same as in recent years, with employers picking up 80 percent of the tab, on average.

And while companies aren't preparing to do away with health-care coverage for employees in the foreseeable future, significant changes are coming, the survey found.

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