It soon will be time for the autumn ritual of open enrollment, as people who get insurance through their employers sign up for next year's coverage.
But this season, which kicks off next week, also will mark a seminal shift with more workers than ever weighing whether a "consumer-directed" health plan might pay off for them.
In consumer-directed plans, the insured generally pay lower premiums but have higher deductibles. The plans have surged in popularity among U.S. employers recently. According to survey results released last week by human-resources consulting firm Aon Hewitt, such plans were offered by 58% of employers in 2011, up from 41% in 2010. Separately, 19% of large employers surveyed by the National Business Group on Health said consumer-directed plans would be the only option they offered for 2013.
Experts say that employees who have a choice need to think carefully before signing up for a plan. For healthy people who are able to manage their expenses, consumer-directed plans can result in real savings. But those with chronic diseases or with a serious risk of injury face the prospect of much higher out-of-pocket costs.
Health-care premiums have risen steadily for decades, of course, for employers and employees alike. Many employers have seen consumer-directed plans as a solution, because they give the insured an incentive to shop for better prices and avoid unnecessary care. "Now that there's been this economic crunch and wages are flat, the increased costs of health care are harder to take," says Helen Darling, president of the National Business Group on Health.
Data from the Kaiser Family Foundation show that in 2012, high-deductible plans had premiums that averaged just under $5,000 for single coverage, about 15% lower than preferred provider organization (PPO) plans, the most common kind of coverage. Overall medical costs also were significantly lower for members of consumer plans: They tended to use fewer brand-name drugs and were hospitalized less frequently than similarly healthy people in traditional plans, according to a study released earlier this year by RAND Corp.
Consumers with few health problems often have seen reduced medical costs. Many of the plans cover annual checkups and other preventive care at no charge. (Such coverage is now mandatory across a wider range of health plans, under the Affordable Care Act.) Many employers also pair the plans with tax-deferred "health savings" accounts that consumers, under some circumstances, can roll over into their retirement savings.
But when consumers do encounter medical problems, the out-of-pocket burden can mount. Deductibles average a little over $2,000 for individuals; after that, employees usually pay a co-insurance payment of 20% until they reach an out-of-pocket maximum. That maximum can be as high as $6,050 for single coverage and $12,100 for families, according to Kaiser.
Amelia M. Haviland, an associate professor of statistics and public policy at Carnegie Mellon University and lead author of the RAND study, notes that the price tag could create the wrong incentives for some patients. "The concern is that they're forgoing care that they need," she says.