Employees Want Choices: HDHP “Only” Coverage Slipping

August 20, 2019

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Source: Modern Healthcare

Fewer large, self-insured employers will offer a high-deductible health plan as the only employee insurance option next year, opting instead to give employees more choice when it comes to health coverage.

For the second straight year, the percentage of large companies offering only a high-deductible health plan with an attached savings account is projected to decrease to a quarter of employers in 2020, down from 30% in 2019 and 39% in 2018, according to the National Business Group on Health’s annual survey of employers’ healthcare strategies and plan designs.

That trend was first observed in last year’s NBGH survey. The group characterizes these plans as “consumer-directed” health plans.

“Enrollment in (consumer-directed health plans) is still very high—over 46% of employees are enrolled in those plans—but it’s no longer becoming the mainstay to have them be the sole plan design offering,” Ellen Kelsay, the NBGH’s chief strategy officer, said during a news conference on Tuesday.

Kelsay explained that in shifting away from high-deductibles as the sole option, employers are responding to employees’ desire for more choice. They have also come to see that high-deductible health plans have not resulted in workers being more informed and engaged with their healthcare, as was once predicted, she said.

Moreover, many employers put high-deductible plans in place as a strategy to mitigate the “Cadillac tax,” but Congress continues to delay that tax, she said.

Beyond adding more plan options, large employers don’t intend to introduce any major benefit design changes in 2020, according to the NBGH, which surveyed 147 self-insured companies that cover 15 million employees and dependents in health plans. Nearly three-quarters of companies surveyed employed more than 10,000 people.

Employers’ healthcare costs are growing slowly at 3.6% in 2018, the lowest increase in recent years.

“While that on the surface is a good indicator, it is still alarming, because it’s higher than wages, it is higher than inflation, and it’s increasing at an unsustainable rate over time,” Kelsay said.

The employers in the survey predicted a 5% increase in their median healthcare costs in 2019 after accounting for cost-management strategies, but NBGH experts said actual cost increases will likely come in lower.

Including premiums and out-of-pocket costs, employers expect healthcare costs to hit $14,642 this year and $15,375 in 2020. Employers will pick up about 70% of the cost, with workers shouldering the rest.

To cut down on costs and improve healthcare quality, employers are turning their attention to improving primary care. About half of companies said they will have at least one advanced primary-care strategy in place in 2020 with another 26% considering one for later. Those include offering primary care on-site or nearby; steering patients to physician-based accountable care organizations, or offering virtual primary-care services beyond traditional telehealth.

Among their top healthcare initiatives, about half of employers said they will implement more virtual care tools in 2020 for physical therapy, behavioral health and other services. Thirty-nine percent of employers said they are focusing more on high-cost claims.

The NBGH also found that most employers have significant reservations about Medicare for All but were split on expanding Medicare to more adults. About 47% of employers responded that their employees’ healthcare costs would increase as a result of Medicare for All, while healthcare innovation and quality would decrease.

“Most of the proposals focus primarily on access and how to provide universal coverage … but they need to focus on how healthcare is going to be delivered,” said NBGH President and CEO Brian Marcotte. “It’s not so much an issue of employers just dismissing it outright; it’s more of a question of there are too many unanswered issues on the table for it to be a reasonable consideration at this point.”


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