Employers up use of high-deductible health plans
CHICAGO (Reuters) - Nine percent of U.S. employers in a poll by a health consulting firm said they plan to offer only one health insurance option next year -- a high-deductible policy that may encourage workers to skimp on care.
This type of plan charges higher monthly deductibles, typically about $1,000 for individuals, in exchange for cheaper monthly premiums and preventive services. The aim is to stem a rise in overall medical costs, which are climbing at twice the rate of general inflation.
Health consulting firm Watson Wyatt Worldwide conducted the poll with the National Business Group on Health, a group of employers such as Wal-Mart Stores Inc. and General Motors Corp.
The poll found that 5 percent of companies offered only a high-deductible plan in 2007, and that figure will rise to 9 percent in 2008.
Consumer groups worry about this trend.
"There is a concern about whether we are working our way toward a system where high deductibles are the norm and consumers don't have a choice," Gail Shearer, a health policy analyst at the advocacy group Consumers Union, said.
"If you are a person of low or moderate income, if the deductible is very high, there will be financial barriers to care."
The survey of 573 large companies, typically defined as those having 500 or more workers, found that 38 percent offered high-deductible plans among a variety of options in 2007, up from 33 percent in 2006.
Consumers have not embraced the plans as enthusiastically as companies have. Just 8 percent of employees enrolled in a high-deductible plan in 2007, a one percentage point increase from a year earlier, the poll found.
"Employers can offer these plans, but it takes more than that to get employees to enroll," said Ted Nussbaum, director of health consulting at Watson Wyatt, which advises employers. "In the old model, I (the employee) paid a $10 copay, and that was the end of my responsibility."
GAUGE SENTIMENT FIRST
Nussbaum on Thursday warned companies to gauge worker sentiment before choosing to offer the plans exclusively.
"Companies need to understand the state of readiness for change within their company before they implement these types of programs," Nussbaum said. "It's all about change, and change is uncomfortable."
The new plans are often coupled with a tax-favored health spending account and give more information to patients on doctors, hospitals and costs in the hope they will make more cost-efficient health-care choices.
Sometimes called "consumer-directed plans", they have been promoted as a way of tackling the rising number of uninsured in the United States, now at 46.6 million people, or about 16 percent of the population.
Critics say the plans attract the healthiest individuals and leave sicker people in the wider insurance pool, which will ultimately increase overall health care costs. They also say the plans are too expensive for the poor and uninsured.
Late last year, another survey found that the plans encourage workers to scrimp on care and that people who were in the plans were more likely to cut back on basic care such as prescriptions or doctor visits.
That study of 3,158 adults was conducted by the Employee Benefits Research Institute, a private nonprofit group funded by large employers, and the nonprofit research group Commonwealth Fund.
Nussbaum said the majority of plans provide free preventive care.
His group's study found that companies that did implement the so-called consumer plans were able to cut costs better than those that did not offer them.
Companies with at least 10 percent of their workers enrolled in such plans kept health-cost hikes at about 6.5 percent, lower than the 8 percent average increase in costs of all employers polled.
Major U.S. health insurers including UnitedHealth Group Inc. and WellPoint Inc. are promoting the plans as a strategy for employers to control double-digit increases in the cost of health care.
