Wednesday, July 10, 2013

Study: Employees Pick Cheaper Health Plans When Given a Choice at Work

Sixty percent of employees allowed to choose between a traditional employer-sponsored health insurance plan and a cheaper, high-deductible or limited network plan opted for the lower prices, a study of employees released Tuesday shows.

The data from 2,503 employees in New York and New Jersey showed that 80% of people chose a plan other than their employer's traditional offering, even if the costs remained the same to the employee, said Alan Cohen, chief strategy officer of Liazon, which provides health exchanges to private employees.

The options included a traditional no-deductible plan, higher-deductible plans in conjunction with health savings accounts, and plans that limited employees to a care network built around one primary care doctor or a limited network around an accountable care organization....

Each plan's benefits were the same; just the payment structure differed. For example, Cohen said, if an employer had paid $600 a month in premiums and the employee $100 before, the employee could instead choose a plan that cost $400 a month with a lower employee premium but a higher deductible. The extra $200 a month from the employer could either go into a health savings account or toward another insurance policy, such as life, vision or dental. About half of the employees chose plans with health savings accounts.

"We've been seeing these results for more than five years," Cohen said. "People make completely different choices than what companies make on their behalf."

The number of people enrolled in health savings accounts (HSA) has more than tripled in the last six years from 4.5 million people in January 2007 to 15.5 million in January 2013, according to America's Health Insurance Plans, a trade association that represents health insurers.

"HSA plans encourage individuals to take an active role in their health care decisions while stretching their health care dollars," Karen Ignagni, AHIP president, said in a statement about the new numbers....

The data also shows that businesses could save money while providing their employees with more choices, he said. Some of those choices, such as closed-network programs or single primary-care physician-based programs, have been avoided in the past because the common wisdom is that people don't like being limited by what doctors they may see.