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Survey Faults 'Consumer-Directed' Health Plans

Posted on: Thursday, 8 December 2005, 21:00 CST

By Diane Levick, The Hartford Courant, Conn.

Dec. 9--Americans in new "consumer-directed" health plans are less satisfied with them and more likely to delay or forgo care than people with regular insurance, says a new survey that could raise red flags for insurers and employers.

The plans, which combine high-deductible health insurance with tax-exempt savings accounts, have been promoted to employers as a way to control health care costs and make people savvier consumers of medical services.

The nationwide survey released Thursday by the Employee Benefit Research Institute and Commonwealth Fund shows that the new plans do make consumers more cost-conscious in health care.

But it also underscores questions about whether skimping on care by members will backfire, requiring more costly treatment down the road.

"You have the potential ... to impose a cost consciousness with a neutral or positive result, and also the potential for harm," said Robert Crane, senior vice president, research and policy development, Kaiser Foundation Health Plan Inc.

"We should be looking for a sweet spot between encouraging cost-conscious behavior, but not going over to an area in which costs will increase long-term because people delay care," Crane said at a conference in Washington, D.C., on the survey.

The study this fall surveyed 1,204 people ages 21 to 64 online who had employer-based or individual health plans. It is the first independent nationwide study of its scope to ask consumers about consumer-directed and high-deductible health plans.

Consumer-directed plans have insurance policies with deductibles of at least $1,000 a year for an individual and $2,000 for a family.

The policies are coupled with a tax-exempt account to help pay for health expenses and meet the deductible. The employer typically contributes money to the account in the type of consumer plan known as an HRA (Health Reimbursement Arrangement). In an HSA (Health Savings Account), an employer or employee can contribute pretax income to the account.

The employer-funded accounts usually aren't large enough to cover the deductible.

So consumers who exhaust the accounts must then pay all medical bills until the high-deductible plan kicks in, and it usually requires consumers to share some of the costs.

The survey also provides data on people who have only a high-deductible insurance policy, but no account.

Only about 1 percent, or 1.2 million, of privately insured people ages 21 to 64 are in consumer-directed plans.

Another 10.8 million are in high-deductible plans without accounts, said Paul Fronstin, senior research associate with the Employee Benefit Research Institute, a nonprofit, nonpartisan organization in Washington, D.C.

Forty-two percent of those surveyed who have a consumer-directed plan were "very" or "extremely" satisfied with their plan, compared with 63 percent who were in "comprehensive," or the more common health plans. Only 33 percent of high-deductible plan members were that satisfied.

However, more than half of the people surveyed with consumer-directed or high-deductible plans were given no other choice of insurance. That fact, Fronstin said, may explain some of the dissatisfaction.

Critics of consumer-directed plans say they shift more medical costs to workers, especially those with health problems, and pose financial burdens.

The survey found that people in consumer plans are much more likely than people in mainstream plans to spend a significant chunk of their income on out-of-pocket medical bills and premiums.

Among those in consumer-directed plans, 31 percent spent 5 percent or more of their income on such costs, while 12 percent in regular plans did the same.

People in the new plans used health services in similar amounts as people in more common plans, but were more apt to say they had avoided certain care to save money.

Thirty-five percent in consumer plans reported that they delayed or avoided health care -- more than twice the 17 percent in regular plans.

The numbers were even higher among people making less than $50,000 a year. The skimping included not filling prescriptions or skipping doses.

Insurers say consumers' concern about cost could mean they're forgoing unnecessary care.

But Fronstin cautioned in an interview that not all care avoidance may be good.

"We don't know how much [of that] is not going to the doctor because you have a cough, or not taking medication when you have diabetes," Fronstin said.

Executives at Aetna and CIGNA, which offer consumer-directed plans, say the survey findings are somewhat inconsistent with studies their companies have done and seen.

Michael Showalter, vice president of consumer-driven health strategy and development for CIGNA HealthCare, cited other organizations' studies in 2003 and 2005 that did not find skimping on care by the chronically ill.

Robin L. Downey, head of product development at Aetna, said the company found that consumer-directed members with chronic conditions such as asthma, diabetes and cardiac problems did not receive less medication or testing than those with the same conditions in other plans.

Aetna currently has about 433,000 consumer-directed members.

Showalter said employers need to be careful about designing consumer-directed plans to avoid burdening people who need care the most.

He said CIGNA tells employers that are considering consumer directed plans, "Don't do this to cost-shift" to workers. "Do it to help them make decisions appropriate for themselves." CIGNA expects to have about 230,000 consumer-directed members as of Jan. 1.

The survey released Thursday also said few health plans of any type provide the cost and quality information about health care providers to help people make good decisions about care -- an especially crucial need in consumer-directed plans.

Companies such as Aetna and CIGNA say they've been spending much time and effort to develop those tools for consumers, but the survey shows consumers may not trust insurers' information, anyway.

Only 4 percent of people in consumer-directed or high-deductible plans and 6 percent in regular insurance considered the plan their most trusted source of information on health care. Doctors were far more trusted, followed by consumer groups.

The health plan trust numbers are "shockingly low," Crane said. He suggested that new organizations might have to be created to help people navigate the health care system.

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Copyright (c) 2005, The Hartford Courant, Conn.

Distributed by Knight Ridder/Tribune Business News.

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CI,

Source: The Hartford Courant, Connecticut

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