Enrollment on the rise in consumer-directed health plans


An analysis of nation health plan enrollment trends shows strong growth in consumer-directed health plans (CDHPs). According to the American Association of Preferred Provider Organizations (AAPPO), which commissioned a study of the Mercer National Survey of Employer Sponsored Health Plans, enrollment in CDHPs grew by 18 percent in 2011, up from 28 million in 2010 to 33 million last year.

AAPPO based its numbers on Census Bureau estimates of the number of Americans with private health insurance and Mercer data on CDHP enrollment in employer-sponsored plans. The analysis categorizes health savings accounts and health reimbursement accounts as the sub-components of CDHPs.

Thirteen percent of all employees with employer-sponsored plans chose CDHPs in 2011 – showing an enrollment growth that no other type of insurance plan saw that year, AAPPO reported.

Last year's increase continues a steady growth trend that started in 2008 (7 percent) and continued through 2010 (11 percent). Survey results show that the trend is likely to continue in the near future as well, with 48 percent of employers of all sizes expecting to offer a CDHP in the next 5 years.

"Our stagnant economy combined with the uncertain fate of the Affordable Care Act has forced employers of all sizes to seek innovative ways to reduce what they spend to cover their employees. Given the cost savings inherent in the consumer-directed model, it's clear that employers -- especially our largest ones -- are increasingly looking to CDHPs to do that," said Karen Greenrose, AAPPO president and CEO. "In today's tough environment, CDHPs -- which are predominantly built on PPO networks -- offer the affordability, choice and access that employers and consumers alike are looking for."

Among large employers – those with 500 of more employees – offerings of CDHPs jumped from 23 to 32 percent from 2010 to 2011. Small employers (under 499 employees) are historically the least likely to offer their employees a CDHP option, but that sector grew from 16 to 20 percent in the last year. Forty-eight percent of the nation's largest employers (20,000 + employees) offered CDHPs in 2011, with 54 percent expecting to offer them in 2012.

"From the numbers AAPPO released today, it's obvious that the CDHP/HSA model is filling a significant void in the marketplace," said Tennessee Representative Phil Roe, who chairs the House Education and Workforce Health Subcommittee,. "As a physician, I know that patients are demanding greater personal control over their healthcare decisions, and their employers want more affordable and manageable costs. CDHPs – and the PPO networks they are built on – are clearly meeting that demand "

Of the 256 million Americans that the U.S. Census Bureau estimates have private or government health insurance, 204 million were enrolled in PPO-based plans, including point-of-service and consumer-driven plans. HMO enrollees represented the remaining 52 million (or roughly 19 percent), AAPPO reported.

Click here to view the entire study.

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