CDHP benefit cost growth slower than other plan designs

March 1, 2006

NATIONAL REPORTS -- The cost of consumer-driven health plans (CDHPs) grew at a significantly slower rate in 2005 than other types of plans, U.S. employers reported in a recent survey.

NATIONAL REPORTS-The cost of consumer-driven health plans (CDHPs) grew at a significantly slower rate in 2005 than other types of plans, U.S. employers reported in a recent survey.

"Controlling rising health benefit cost continues to be the number one influencer of employer strategies, according to industry experts. Unfortunately, incremental changes focused on shifting costs-either through plan design, contributions, or a combination of both-have not had a significant enough impact to satisfy purchasers," says Barbara P. Gniewek, principal and healthcare industry leader of Deloitte's Human Capital practice. "Employers feel transformational change is required to slow and/or stop the rising cost trends."

A survey by the Deloitte Center for Health Solutions and cosponsored by The ERISA Industry Committee, found that while most employers still offer several platform types, enrollment in POS, PPO and HMO plans has dropped slightly, and more employees are selecting consumer-directed options. "CDHP rate increases are much lower [2.6% in 2006] than traditional options [7.5%], and therefore, we expect CDHP enrollment to continue to grow," Gniewek tells MANAGED HEALTHCARE EXECUTIVE.

"This often includes some level of consumerism, account-based plans, preventive and wellness incentives and care/disease management programs," Gniewek says. "Risk stratification and data integration are going to be ways to measure the impact of these new plan types."

In addition to cost savings, CDHPs offer employees an additional tool to save money tax-free for retiree health, says Edwina Rogers, vice president health policy for The ERISA Industry Committee. "Further, many of our members are aggressively working to supply their employees with quality and efficiency information on healthcare providers and electronic medical records so they can make wise choices with their healthcare dollars," Rogers says.