High-deductible health plans have become an increasingly popular means for employers to keep health care costs under control. According to data released last summer by the Centers for Disease Control and Prevention, between 2007 through 2017, the percentage of adults 18-64 with employer-provided health insurance who were enrolled in an HDHP with a health savings account increased from 4.2 percent to 18.9 percent, while the percentage enrolled in an HDHP without an HSA rose from 10.6 percent to 24.5 percent.
Over the past three years, however, our benefits research at Gartner shows that their popularity has been leveling off, as deductibles for individual plans have actually been trending downward. (Gartner Total Rewards Leadership Council clients can view our full report on medical plan trends and observations for 2018 here.) This trend suggests that employers are having second thoughts about whether the benefits of HDHPs outweigh the downsides.
A new survey published last month by the nonprofit Employee Benefit Research Institute (EBRI) and research firm Greenwald & Associates provides some insight into these pros and cons. The survey found that people enrolled in HDHPs were more likely to compare cost and quality when selecting non-emergency health care and to make cost-conscious decisions like choosing generic prescription drugs over brand names. HDHP enrollees also more likely to be offered and to participate in wellness programs through their employers, including programs that involve biometric screenings.
On the other hand, this cost-conscious behavior may not be entirely voluntary: 30 percent of HDHP enrollees said they delayed care in the previous year because of costs, compared to 18 percent of respondents covered by traditional health insurance plans. While the EBRI study does not clarify whether this care was essential or non-essential, another recent study of diabetics found that switching to a high-deductible plan increased their likelihood of delaying essential care.
A recent data brief from the Centers for Disease Control and Prevention illustrates the growth in popularity of high-deductible health plans (HDHPs) over the past decade. Between 2007 through 2017, the CDC data show, the percentage of adults 18–64 with employer-provided health insurance who were enrolled in an HDHP with a health savings account increased from 4.2 percent to 18.9 percent, while the percentage enrolled in an HDHP without an HSA rose from 10.6 percent to 24.5 percent. In 2017, enrollment in HDHPs was highest among adults aged 30–44 than among other age demographic.
The greater an individual’s family income level and educational attainment, the more likely they were to be enrolled in an HDHP with an HSA, the CDC found, while the likelihood of enrollment in both traditional health plans and non-HSA high-deductible plans decreased as income and education rose. This may reflect a greater understanding of the investment value of HSAs among higher-earning and more educated employees.
Other recent data tells a similar story: Last year, Bank of America Merrill Lynch’s Plan Wellness Scorecard found that more employers were offering HSAs, more employees were using them, and their account balances were growing. That report also found that employees were using about 70 percent of their HSA contributions to cover health expenditures during the year and saving the other 30 percent for future expenses.
However, while the adoption of HDHPs has certainly grown over the past decade, our benefits research at Gartner shows that their popularity has been leveling off over the past three years, when deductibles for individual plans have actually been trending downward. (Gartner Total Rewards Leadership Council clients can view our full report on medical plan trends and observations for 2018 here.)
General Motors has made a deal with Henry Ford Health System, a Detroit-based hospital system, to provide a new health care plan to its salaried employees and their dependents in southeast Michigan, the Wall Street Journal reported on Monday. The optional ConnectedCare plan, which will be available to some 24,000 GM employees and their dependents starting next year, replaces traditional group health insurance with a direct-contract system wherein Henry Ford will manage nearly all of the participating employees’ health care needs.
The company’s existing health insurance options will remain available, but the ConnectedCare plan is expected to save them anywhere from $300 to $900 a year compared with the current cheapest option. According to a press release from the Henry Ford system, the plan will give GM employees access to more than 3,000 health care providers offering “a comprehensive range of health care services including primary care, more than 40 specialties, behavioral health services, hospitalization and emergency care as needed, as well as pharmacy and other services.”
Under the five-year contract, the hospital system agreed to specific goals for quality, cost and customer service. For instance, plan participants are promised same-day or next-day appointments with primary care physicians and appointments with specialists within 10 business days. They will also have access to a range of digital health tools, wellness services, and assistance in managing their care and choosing the right health care options, Henry Ford said in its statement.
Blue Cross Blue Shield of Michigan, GM’s insurance provider in that state, will continue to manage claims-processing and other functions, while again continuing to provide the PPO plans GM already offers its employees. ConnectedCare will not apply to GM’s large unionized workforce in Michigan, whose health benefits are negotiated under a labor agreement.
The latest data from the Labor Department shows that the percentage of private sector employees in the US offered health insurance through their employer rose from 67 percent in 2017 to 69 percent this year, the Wall Street Journal reported earlier this month. This figure had dwindled from 71 percent in 2010, when the department began conducting this survey, and this latest uptick represents the first year-over-year increase since 2012.
The Labor Department report showed that 86 percent of full-time private sector employees were offered health benefits, along with 21 percent of part-timers. Union members were significantly more likely to be offered these benefits (94 percent) than non-union employees (66 percent). Of those private sector employees offered medical benefits, 72 percent chose to take advantage of them.
Smaller employers, who are not required to offer health insurance under the Affordable Care Act, had driven most of the decline over the past eight years: Among organizations with fewer than 50 people, 51 percent offered health insurance to their employees in 2018 compared to 55 percent in 2010. Large businesses, with over 500 workers, have been more consistent in offering these benefits, with the percentage of large employers providing health insurance hovering near 90 percent since 2010.
The ACA mandates that organizations with 50 or more full-time equivalent employees offer at least a minimum standard of health benefits to employees working 30 or more hours a week, or pay a penalty of $2,000 per employee. Most large businesses already offered medical benefits before the ACA took effect and continued to do so, but some mid-sized employers have chosen to pay the penalty instead, as the cost of covering their employees would be greater, Paul Fronstin, director of the Health Research and Education Program at the Employee Benefit Research Institute, told the Journal.
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Large US employers, particularly tech companies, have been vocal advocates of transgender rights and acceptance in recent years. Beyond public statements and activism, however, these organizations are also looking at ways to make their HR policies more inclusive of their transgender employees. Fast Company’s Lydia Dishman observed recently that major companies are doing making more of an effort to be trans-inclusive, particularly in terms of ensuring that their benefit plans cover gender-affirming health care:
The Human Rights Campaign, a leading advocacy group, announced last year that over 450 major U.S. employers now have policies to support employees through the transitioning process. Separate research from the International Foundation of Employee Benefit Plans (IFEBP) found that these numbers are inching up throughout the U.S. workforce. Twenty-two percent of the nearly 600 HR professionals surveyed said their health plans cover gender confirmation procedures, up from 8% in 2016; a quarter provide mental-health counseling pre- and/or post-surgery, up from 11% two years ago; and 24% cover prescription drug therapy, up from 9% over the same period.
However, these benefits are more likely to be found at large employers like Intel, with workforces in the tens of thousands, than at smaller ones; IFEBP found that only 10% of companies with fewer than 50 employees offer trans-friendly health benefits, up from 4% in 2016.
By way of example, Dishman looks at Intel, which introduced coverage for all gender confirmation procedures, following standards set by the World Professional Association for Transgender Health (WPATH), in 2016, with no maximum lifetime benefit; and Amazon, which began offering unlimited coverage for trans medical care in 2015. Starbucks announced late last month that it had updated its health insurance policy, with help from WPATH, to cover a wider range of procedures that insurers often label cosmetic and refuse to cover but that trans people and their health providers consider essential to their transition process:
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The health insurance company Cigna announced a new initiative last week in which it is “intensifying its commitment to curtail the opioid epidemic by focusing new drug prevention and treatment efforts in targeted US communities.” Cigna said its goal was to reduce the number of opioid overdoses among its customers in these communities by 25 percent by December 2021:
Initially, Cigna will focus its local efforts in areas where a sizable number of Cigna commercial customers reside and where there are higher than average overdose rates, including communities in the states of Connecticut, Maryland, New Jersey and Virginia and in the metropolitan areas of Chicago, New York, Philadelphia and Washington, D.C. The goal is to reduce prescription and illicit opioid overdoses in these areas, and Cigna will advance initiatives that impact both Cigna customers and the communities at large. To support this initiative, Cigna and the Cigna Foundation will expand and accelerate the impact of community-based organizations that are leading localized programs. Cigna intends to learn from initial efforts during the three year time period and expand to other communities over time.
The main channel for these efforts is through health care providers, with whom Cigna is working to limit the prescription of opioid pain medication, address warning signs of opioid addiction, and guide patients toward less dangerous pain management options. Most US adults receive health insurance coverage through their employers, so partnerships with employers are also a key component of this effort, Cigna added:
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The joint venture launched earlier this year by Amazon, Berkshire Hathaway and JPMorgan Chase to explore new ways of lowering health care costs for their employees now has a dedicated leader. Dr. Atul Gawande, a renowned surgeon, medical researcher, and author of several highly regarded books on medicine who has also been a staff writer at the New Yorker for 20 years, will serve as CEO of the as-yet-unnamed organization, Fortune reported on Wednesday:
Gawande may come as an unexpected choice to lead this new health care company, whose aim is to decrease health care costs and improve outcomes for the approximately one million employees in the triumvirate’s workforce. He practices general and endocrine surgery at the renowned Brigham and Women’s Hospital in Boston and is a researcher and professor at Harvard’s T.H. Chan School of Public Health. …
Following the Amazon-JPM-Berkshire announcement, Gawande stated that he would continue his positions at Brigham and Women’s and Harvard and will keep writing for the New Yorker even as he takes the reins of the health venture on July 9. He will, however, step away from his role as executive director of Ariadne Labs—a company he founded that focuses on health care delivery with a global health-focused bent—to become its chairman.
Few other details are publicly known about the partnership, which was announced in January, sending ripples through the stock market as pharmacy benefit managers, health insurance companies, and biotechnology firms wondered what it would mean for them. The organization Gawande has been hired to lead is an independent nonprofit based in Boston, which is expected to focus on technological solutions, data sharing, and its participants’ bargaining power as large buyers in the health care marketplace. The organization may eventually partner with other companies along with Amazon, Berkshire, and JPMorgan.