CDHPs Offer Less Savings Than a Year Ago

Among employer-sponsored health insurance plans, consumer-directed health plans (CDHPs) continue to increase in popularity even though they are offering less savings than a year ago, according to the 2016 Health Plan Survey from United Benefit Advisors (UBA).

UBA finds 26.4% of all U.S. employees are now enrolled in CDHP plans, an increase of 21.7% from last year and nearly 70% from five years ago.

However, CDHP plan costs have risen 2% from last year, according to UBA. So while they are still 3.5% less costly than the average plan, they offered more savings in 2015 when they were 5.6% less costly than the average plan.

UBA says trends in the West are worth watching. CDHPs have increased in prevalence in all regions except the West, which saw the number of these plans decrease by 7.2% from 2015. Despite this decrease in the number of CDHPs offered in the West, there was an 18.9% increase in the number of employees enrolled, indicating the continued attraction to the lower premiums of such plans.

But, while most of the country is experiencing slightly increased premiums, California has enjoyed an 11.4% decrease in average single premiums. Employers in this part of the country are actually moving away from CDHPs and toward HMOs, which the survey shows are 9% less costly than the average plan.

“Cost-saving strategies, like cost shifting, should be taken with a grain of salt, given the increased burdens they place on employees,” says Les McPhearson, CEO of UBA. “Given the higher than average out-of-pocket costs of CDHPs, this turbulence in the West (who typically leads the nation in health care trends) indicates that employers and employees are still determining the value and success of these plans, making it a cautious upward trend to watch.”

UBA’s 2016 Health Plan Survey Executive Summary is available now at http://bit.ly/UBAsurveyor. It can be downloaded directly at http://bit.ly/2016-executive-summary.

The 2016 UBA Health Plan Survey contains the validated responses of 19,557 health plans and 11,524 employers, who cumulatively employ more than two and a half million employees and insure more than five million total lives. The focus of the UBA survey is to report results that are applicable to the small and mid-size companies that represent the overwhelming majority of the nation’s employers, while also including a mix of large companies in rough proportion to their actual prevalence, nationally.