At the end of 2005, 3.2 million Americans had one — seven times the amount as the previous year. By 2010, the Treasury Department predicts that number will increase to 14 million. But what exactly is this product that is rapidly growing in usage across the country?
It is a high-deductible health plan that is compatible with a Health Savings Account (HSA). This is just one of the elements of consumer-directed health care, which is an increasingly popular way for companies to control health care costs while still providing their employees access to affordable, high-quality benefits. “As more companies and individuals become familiar with consumer-directed health care and its advantages, you will see these numbers continue to increase,” says Bill Berenson, vice president of sales and service for Aetna’s Small & Middle Market Business in the North Central Region. “Consumers are starting to express a desire to take charge of their health care, while employers are always looking for ways to control costs. Consumer-directed health care can help them both.”
Smart Business spoke with Berenson, who answered several questions on consumer-directed health care and health care “consumerism” — the idea of raising an individual’s awareness of the real costs of health care and providing them with opportunities for greater decision-making control over their health care spending.
What are some of the advantages for employees that have plans with HSAs available?
Several qualities would make an HSA-compatible plan attractive for employees, with the primary being that employees are allowed to put aside money to pay for qualified medical expenses on a tax-favored basis.
HSAs are also adaptable, as they can be funded by an employer, an employee, an employee’s family member or any combination. This flexibility is also a huge advantage for an employer, as they can customize the contribution method to best fit their specific needs.
Finally, HSAs are convenient and portable, as employees can carry over any unused funds to the next year, can take the account funds with them if they change jobs, and even use the funds to pay for medical expenses in retirement.
Would specific groups of employees be more likely to choose consumer-directed health plans?
Our research indicates that is not the case. In a recent study of more than one-and-a-half million of our members, we found that the average age and family size of those individuals that chose a consumer-directed plan was very similar to those that chose a more traditional plan option.
What should employers do to help their employees better understand how to use consumer-directed health plans?
Since consumer-directed health plans are still relatively new in the market compared with more traditional types of plans, it is important that employers communicate the major features of these plans to their employees.
It is also essential to find an insurance carrier that provides best-in-class, secure interactive tools where members can access their own personal data as well as find other relevant health-related information such as price and performance comparisons between doctors and hospitals.
If consumers are expected to be more involved in their health care decisions, they need to be able to make educated, informed choices. Giving them the resources to do so is one of the building blocks of consumer-directed health care.
Do any results demonstrate the success of consumer-directed plans?
The study that found the characteristics of individuals who chose consumer-directed plans versus those that did not also found that consumer-directed plans consistently result in lower medical costs for the employer while still maintaining or improving levels of chronic and preventive care for the members. In addition, the results also indicated an increased usage of generic medications and consumer tools and information.
These findings demonstrate that individuals on consumer-directed plans take a more active role in the health care process, which in turn appears to drive down costs for employers. With significant benefits for both sides, it is apparent why consumer-directed health care is growing at such a rapid rate.
BILL BERENSON is vice president of sales and service for Aetna’s Small & Middle Market Business in the North Central Region. Reach him at (312) 928-3323 or firstname.lastname@example.org.