Large employers flock to consumer-driven health plans

Plan enrollment all together jumped 18 percent in 2011

Enrollment in consumer-driven health plans is far outpacing other types of health coverage, according to new analysis from the American Association of Preferred Provider Organizations. Large employers, specifically, are eager to offer these plans.

Offerings at employers with 500 or more employees jumped from 23 to 32 percent from 2010 to 2011, the biggest one-year increase that AAPPO has seen so far.

Forty-eight percent of the nation's largest employers (20,000 + employees) offered CDHPs in 2011, with 54 percent expecting to offer them in 2012.

Small employers (under 499 employees) are historically the least likely to offer their employees a CDHP option, but even that sector grew from 16 to 20 percent in the last year.

Altogether, enrollment in CDHPs grew by 18 percent in 2011, up from 28 million to 33 million over the course of a year. AAPPO says the trend started in 2008 and continued through 2010. The popularity of CDHPs corresponds with a decline seen for HMOs.

The trend is likely to continue, with 48 percent of employers of all sizes expecting to offer a CDHP in the next five years.

"Our stagnant economy combined with the uncertain fate of the Affordable Care Act has forced employers of all sizes to seek innovative ways to reduce what they spend to cover their employees. Given the cost savings inherent in the consumer-directed model, it's clear that employers — especially our largest ones — are increasingly looking to CDHPs to do that," said Karen Greenrose, AAPPO president and CEO. "In today's tough environment, CDHPs — which are predominantly built on PPO networks — offer the affordability, choice and access that employers and consumers alike are looking for."

Of the 256 million Americans that the U.S. Census Bureau estimates have private or government health insurance, 204 million were enrolled in PPO-based plans, including point-of-service and consumer-driven plans. HMO enrollees represented the remaining 52 million (or roughly 19 percent).

"It's obvious that the CDHP/HSA model is filling a significant void in the marketplace," said Tennessee Representative and chairman of the House Education and Workforce Health Subcommittee, Phil Roe. "As a physician, I know that patients are demanding greater personal control over their health care decisions, and their employers want more affordable and manageable costs. CDHPs – and the PPO networks they are built on – are clearly meeting that demand."

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