Even before health care reform took hold, consumer-driven health care plans such as HSAs, health reimbursement accounts (HRAs) and flexible spending accounts (FSAs) were already growing in popularity. The steady increases in group health plan premiums are one of the main reasons. The data on just how much premiums have increased depends upon whose survey you use and the timeframe involved.
A Kaiser Family Foundation survey of over 2,000 employers found that group health plan premiums increased 9% in 2011 or to an average cost of $15,703 for family coverage. A state-by-state analysis performed by the Commonwealth Fund (a nonprofit organization that studies health care quality, access and affordability) found that health insurance premiums for employer-based plans increased 50% from 2003 to 2010. The analysis also found that the increase in premiums was greater than the growth in the median household income for every state. The Commonwealth Fund’s analysis projected an additional 72% increase by 2020 if no reforms were made.
According to a National Center for Health Statistics finding, the percentage of group health plan enrollees in high-deductible health plans (e.g., those with deductibles of $1,200 for self-only coverage and $2,400 for family coverage based on how the Department of Health and Human Services defines them), grew from 12.9% in 2007 to 20.3% in the first quarter (Q1) of 2011. Enrollment in consumer-driven health plans — high-deductible plans linked to an HSA or HRA – experienced even greater growth, going from 4.5% in 2007 to 8.8% of group plan participants in Q1 of 2011. FSAs growth grew from 16.7% of group plan participants in 2007 to 20.7% in the Q1 of 2011. The National Center for Health Statistics cited healthcare reform as one of the primary drivers for the growth in consumer-driven health plans.
Based on employers surveyed by Mercer LLC regarding their rising group health plan premiums, 47% said they planned to raise their plans’ deductibles or increase the percentage of plan premiums paid by their employees in 2012. Using high deductible health care plans is a way to contain costs and provide an incentive for employees to be more conscientious health care consumers. A Towers Watson & Co. survey, conducted in the fall of 2010, found that 66% of employers were planning to offer a consumer-driven health plan in 2012.
Consumer-driven healthcare plans offer a win-win for employers and employees alike. They provide financial and tax advantages for both employer and employees, while also encouraging employees to become better informed and more prudent consumers of health care.