You Should Know:
- High-deductible health plans (HDHPs) play an important role in the health benefits marketplace. Premiums are lower, which allows many employers, especially small businesses, to provide health benefits they might not otherwise be able to afford.
- HDHPs are one solution to the growing problem of the uninsured. New data show 27 percent of HDHPs with health savings accounts (HSAs) sold in the small group market were to employers that did not previously offer coverage to their employees.1
- HDHPs also help raise consumer awareness of the real costs of health care, which is having a positive impact on rising health care costs. Research also has shown that total health spending is reduced when consumers bear more responsibility for their health care expenses.2
Background
With health care costs continuing to rise at double-digit rates (11.2 percent in 2004), many employers have been forced to reduce benefits, shift more cost to employees or drop coverage entirely. Less than two-thirds of all employers now offer health insurance to their employees. Employee contributions to health care costs have increased 126 percent over the last five years.
3 HDHPs, with their lower premiums, offer employers an affordable choice when offering health benefits to their employees.
How HDHPs Work
HDHPs give consumers a larger role in health-care-decision-making and create greater awareness of the rapidly increasing cost of health care services. With the exception of many preventive care services, covered employees must pay the deductible - a preset level of medical expenses - before most medical expenses are covered by the plan. HDHPs are often combined with an HSA or a health reimbursement arrangement (HRA), which help plan members meet their deductibles. These plans encourage greater cost awareness and responsible, informed decision-making with the help of consumer information tools.
The Aetna Difference
Aetna has expanded its benefits options to include HDHPs and a full range of consumer-directed plans through its Aetna HealthFund® family of products. Aetna also has introduced new coverage options for individuals and their families in a number of states. These Aetna Advantage PPO plans and high-deductible plans that are compatible with HSAs provide comprehensive, affordable coverage.
Results
A recent Watson Wyatt study found that one out of four employers had significantly increased either employee premiums or cost sharing at the point of care in the previous year. The same study found employers who engaged workers in health care decisions were significantly more successful at controlling health care costs than those employers who did less to encourage employee engagement. Also, a study as far back as the 1970s shows that participants in HDHPs used 25-30 percent fewer services than those in a no-cost plan.
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Questions & Answers:
Q. Aren't HDHPs really just a means of cost-shifting to save employers and insurers money?
A. No. Continually rising health care costs pose a real danger to consumers and the health care system overall. As costs rise, more employers abandon or reduce health coverage for their employees, leaving more Americans uninsured. The proportion of Americans under age 65 with employer health coverage fell from 67 percent in 2001 to 63 percent in 2003, resulting in almost 9 million fewer people with employer-based coverage.
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High-deductible plans are more affordable than other types of coverage, allowing many consumers to obtain or maintain coverage. HDHPs are not for everyone, but they are an important option in a full range of benefits offerings now available to the marketplace. It is also important to remember that high-deductible coverage is typically offered in conjunction with HSAs or HRAs that help consumers pay a portion of their deductibles. These consumer-directed plans also generally feature 100 percent coverage of preventive care and access to information tools that help consumers navigate the health care system.
Q. Do high-deductible plans prevent consumers from getting the care they need?
A. No. Consumers in HDHPs have the security of knowing they have coverage for major medical events, and most consumer-directed plans with a high deductible include 100 percent coverage of preventive care. In a study of its own HealthFund HRA members, Aetna found that use of preventive care increased by as much as 23 percent, compared to 8 percent for similar members (based on demographics, coverage, health status, health severity and geography). Independent research also shows that among people enrolled in HDHPs who were typical of Americans covered by employment-based insurance, variation in use of services appeared to have minimal to no effect on health status.
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Certainly there are times when consumers with high deductibles face tough decisions about whether to access health care services. It is very important, therefore, that consumers in HDHPs become fully informed about the choices they face so that they can make the treatment decisions that are right for them. To fill this need, Aetna provides its members with access to a full array of health and benefits management information online through Aetna Navigator™, the company's easy-to-use member self-service website, and via telephone. Aetna's online information for consumers includes evidence-based, clinical information on 5,000 health topics; an interactive online health and wellness program; and a suite of cost comparison tools called "Estimate the Cost of Care."
Q. Will high-deductible plans replace other health benefits products?
A. While HDHPs plans are an important health care benefits option, the marketplace continues to look for a full complement of health products and services to effectively meet the needs of today's employers and consumers. To meet that demand, Aetna has developed a comprehensive family of products and services.
