New health insurance unused here, but . . . Coverage that shifts risk to employees is expected to grow more popular

Posted June 25, 2004
By James T. Mulder, The Post-Standard

A controversial new type of health insurance plan designed to make workers more thrifty in their use of medical care isn’t catching on yet with Upstate employers, according to a survey by Excellus BlueCross BlueShield.

But that could change dramatically as employers look for ways to curb the soaring cost of employee health benefits, the survey said.

“Consumer-driven health plans” are an option for about 1 percent of Upstate workers with employer-sponsored health benefits. That number could grow to as much as 36 percent over the next two years, according to the survey released Thursday.

Consumer-driven plans typically have high deductibles – often $2,000 for singles and $4,000 for families – coupled with health savings accounts to which employers contribute a fixed amount each year.

Employees use money from the savings accounts to pay for health services. Traditional health insurance coverage doesn’t kick in until employees meet their deductibles. These plans are less expensive than traditional plans because employees are exposed to greater financial risk.

Fans of these plans say they make employees more responsible consumers of medical services and encourage them to take better care of their health.

Critics contend the new plans penalize older, sicker employees and could encourage some people to delay or forgo needed care.

“If the Upstate employers surveyed follow through on what they reported, this would mark a rapid and radical shift away from the types of health plans that, for decades, have dominated the Upstate market,” said Leon Lamoreaux, product expert for Excellus’ consumer-driven plans. “With the cost of health care increasing at more than six times the overall rate of inflation, employers are finding themselves at a crossroads. They’re telling us they are ready to consider a different path, and that path may turn out to be consumer-driven health care.”

The survey polled benefit managers of 589 randomly selected public and private Upstate companies. Excellus hired Health Research and Educational Trust, a nonprofit research organization, to do the survey.

Sixty-seven percent of employers surveyed think these plans would make employees wiser health care consumers.

At the same time, many employers expressed skepticism about the plans; 36 percent said the plans would be popular with employees, while 42 percent thought the plans would improve quality of care.

The full report is available on the health insurer’s Internet Web site. The address is:

© 2004 The Post-Standard. Used with permission.

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