After years of growing separation between Consumer Directed Healthcare and older healthcare insurance plans such as PPOs, a major study found a significant cost difference in 2011.
The respected Kaiser Family Foundation employer survey identified what many experts have been saying: Health Savings Account and Health Reimbursement Account insurance premiums are significantly lower overall than other plans.
The gap in premiums between HSAs and older benefit designs is being described as huge by pundits in the field. The based this conclusion on the findings of the new Kaiser Family Foundation employer survey just released.
According to KFF, HSAs have 18% lower premiums. HRAs are at least 3% lower-priced for the average employer-paid family premium across the U.S.
The average 2011 HRA family premium is reported as $14,909 a year in the U.S. and the average HSA premium is $12,655, compared with $15,363 for non-CDH plans. All three are paid for with different out-of-pocket cost combinations: HSAs have the highest OOP cost but are the fastest-growing, HMOs have the lowest OOP cost but are the least-popular option.
These premium differences are clearly driving adoption. Using the KFF definition, CDHPs are offered to almost 25% of all workers nationwide, and the latest survey finds that 17% of all employees are now in an HSA or HRA. The most telling stat: 84% of all employers now offer only one type of plan.
These same pundits argue this bodes well for total replacement HSA or HRAs going forward.
According to JoAnn M. Laing, chairperson of Information Strategies, Inc. which has surveyed and monitored the HSA sector since its inception, “the promise of HSAs as a vehicle to reduce overall healthcare insurance costs for individuals and employers is being borne out.”
“Our studies have shown that once HSAs (and HRAs) gained traction growth would move on a high level in ensuing years. 2011 proved to be the tipping point.
Healthcare insurance options offered by businesses show that CDHPs are moving up fast on offer rate: 23% across all firms. HMOs are offered at 16% of firms, and “POS” is at 24%. Pure PPOs without any account are still strong, but just fell to a 50% offer rate across all firms. CDHPs have the second-highest offer rate (behind PPOs) in firms with over 200 workers.