HDHP Use Flattens as New Cost Saving Strategies Increase

High deductible health plans (HDHP) remained static this year, representing 30% of all health plans in its database, according to a report from DirectPath, in partnership with Gartner, “2018 Medical Trends and Observations Report.” Twenty-eight percent of all plans are HDHPs for individual coverage, and 30% are HDHPs for family coverage.

This is the fourth consecutive year of minimal growth in the prevalence of HDHPs, the firm notes.

“With the Cadillac tax postponed yet again to 2022, employers are under less pressure to minimize their use of high-cost plans,” the report says. “In addition, employers are increasingly recognizing that one size does not fit all when it comes to health care benefits. Employees have different health care needs based on their age, income, and family situation.”

“As employers plan for 2019 and the years ahead and seek to migrate more employees into HDHPs, benefits executives should remember that providing tools such as advocacy and transparency services, along with comprehensive education on how to use HDHPs and their associated accounts, may be a more effective way of controlling costs than a move to full-replacement HDHPs,” the report adds.

The report also notes that individual deductibles and plan surcharges have declined. The median individual deductible dropped over 8% to $800 while the family deductible rose 7% to $2,000. Only 24% of employers impose tobacco use surcharges, and 21% impose a spouse/partner tobacco use surcharge; 12% impose both. The median charge for tobacco use is $50 and for a spouse/partner, it is $150.

Employers are introducing more convenient and high-quality health care options. Fifty-five percent of employers offer telemedicine, with many covering all of these costs or charging no copay. In an apparent bid to encourage utilization of lower-cost providers, the median copay for telemedicine visits equals that of a standard office visit ($20)—which is down slightly versus the past two years. In addition, a number of employers are calling out specific copays (median $20) for retail clinics (such as those at CVS/Target), with these typically costing less than an urgent care center ($35 copay). The median copay for Emergency Room care has declined substantially to $100 per visit.

Thirty-one percent of employers are offering wellness incentives, with most offering incentives for more than one activity, such as getting a biometric screening or completing a health risk assessment.

Voluntary benefits remain a popular strategy for employers to expand their benefit offerings. Supplemental life, legal services, critical illness and ID theft protection are among the most popular—supporting the trend of employers focusing on boosting financial benefits in light of necessary cutbacks in the health care arena. There was a huge decline in popularity of some voluntary benefits since last year—such as supplemental life and AD&D—which may reflect those benefits becoming part of an employer’s standard offering versus a voluntary benefit.

The full report can be downloaded here.