Enrollment in Consumer-Driven Plans Doubles in Two Years

The newly released annual Kaiser Family Foundation/Health Research & Educational Trust (KFF/HRET) Employer Health Benefits Survey is out! I’m about to criticize KFF’s spin, so let me start by congratulating them on another outstanding achievement. The annual publication is an invaluable resource for those of us who want to understand what’s going on out there, and both KFF and HRET must invest a lot of resources in executing the survey.

I’ll point out two things. First, premiums went up 5 percent in 2008, which is actually less than I’d expected and is hardly indicative of a “crisis”. Second, the number of workers in consumer-driven plans (which KFF/HRET defines as eligible for a Health Savings Account or Health Reimbursement Arrangement) has doubled from 4 percent of workers in 2006 to 8 percent in 2008.

It’s no coincidence that growing numbers of people in consumer-driven health plans and relatively restrained premium growth go together. The right way to look at this is to understand that American families are controlling more of their health care dollars, and demanding better value for money. Another way is to moan about how higher deductibles and co-pays are forcing families to make tough decisions about how they spend their money.

As usual, the good people of KFF have found the cloud inside the silver lining. Although not in the press release, the McClatchy newswire quoted KFF CEO Drew Altman’s dire speculation that “we may be seeing the tip of the iceberg of a trend towards less comprehensive, skimpier insurance with higher out-of-pocket payments for working people.”

Actually, despite the growth of consumer-driven plans, the share of health spending controlled by patients has been shrinking. In the mid 1990s, out-of-pocket spending accounted for 30 percent of health spending amongst privately insured people. It was down to 26 percent by 2005. By 2007, workers were paying 16 percent of total premiums, down from 20 percent in 1993, for single coverage. For family coverage, it dropped from 32 percent to 28 percent.

Consumer-driven health care has had a very good start, but we have a long way to go to get the health care dollars out of the “system” and into the hands of the patients who need them.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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