New Report From the Actuaries

A May 2009 report form the American Academy of Actuaries, summarizes the latest data on the performance of Consumer-Drive Health Plans (CDHPs). The authors conclude that CDHPs cut expenditures 4 to 15 percent in their first year. After the first year, the expenditure growth rate is 3 to 5 percent lower than in comparable PPO plans.

After controlling for possible selection bias, there was no evidence that people reduced expenditure by avoiding necessary care. People in CDHCs purchased more preventive care, were more likely to receive recommended care for chronic conditions, and take their prescribed medications. They were more likely to use generic drugs, and less likely to use inpatient services and emergency rooms.

Out-of-pocket costs were lower for CDHP members. In one study, "Even members with greater than $10,000 in total claims had nearly 17 percent lower out-of-pocket expense than PPO members, a savings of over $400 per member." Premium costs were lower as well. On average, employees in CDHCs paid $98 a month for employee-only coverage in PPO/POS plans, $92 a month for HMO plans, $46 for HSA-eligible CDHPs, and $58 a month for HRA-eligible CDHPs.

Comments (4)

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  1. Ken says:

    Fifteen years ago this group was on the other side. Glad to see they’ve come around.

  2. Bret says:

    Agree with Ken. This is an about face for the actuaries. And it’s long overdue.

  3. Ron Greiner says:

    Linda, these HSA people are tightwads. They don’t like paying taxes. It’s an attitude. Even after they reach their deductible and insurance is paying 100% they still scope their bills looking for medical fraud.

    HSA consumers will pay $7 a month extra for preventative services with a zero deductible that pays 100% to $500 annually. Some lazy insurance companies just build in preventative services but we insist on giving the consumer maximum choices.

    Remember, you don’t need a group to have a plan.

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