Enrollment Up in High-Deductible Health Plans

By Emily P. Walker, Washington Correspondent, MedPage Today

WASHINGTON — Enrollment in high-deductible health insurance plans that are tied to health savings accounts (HSAs) grew by nearly 14% in the past year, according to America’s Health Insurance Plans (AHIP), an industry trade group.

As of January 2011, 11.4 million Americans are covered by high-deductible plans, which are eligible to be coupled with an HSA that can be rolled over from year to year and can be used at any time to pay medical expenses.

AHIP, which takes an annual census of enrollment in HSA-eligible plans, found that enrollment in the plans has nearly doubled over the last three years. Much of the growth was seen in the large-group market, which is is a group that generally enrolls in more traditional health insurance plans in which participants usually have to pay higher monthly premiums.

“HSA plans continue to be a vital source of affordable coverage for millions of families and employers across the country,” Karen Ignagni, president and CEO of AHIP, said in a press release.

HSAs, which were authorized by the Medicare Prescription Drug Improvement and Modernization Act of 2003, must be coupled with a high-deductible health plan, sometimes referred to as catastrophic coverage. Although a person can have a high-deductible plan and not have an HSA, that’s pretty rare.

“They go hand in hand,” explained Paul Fronstin, PhD, of the Employee Benefit Research Institute.

Fronstin said it’s not surprising that more people are enrolling in the plans, which have low monthly premiums, offer fewer benefits than traditional plans, and include high deductibles that a patient must meet before coverage kicks in. Healthcare costs paid by employers are continuing to grow, so it’s expected that employers will look to offer plans where they contribute less money.

A recent survey found that nearly a third of employers plan to stop offering employee health insurance starting in 2014, once the Affordable Care Act (ACA) goes into effect.

AHIP is calling for policy changes to get rid of provisions in the healthcare reform law that might limit use of HSAs. For example, one provision in the law prohibits the use of HSAs to pay for over-the-counter medicine without a doctor’s prescription.

AHIP said new medical loss ratios that govern how much an insurer can spend on administrative costs versus paying claims will be unfair to HSA-eligible plans. Under the medical loss ratio provision of the ACA, insurers must spend 80% to 85% of their premium revenue on actual medical care, and 15% to 20% on administrative costs and profit.

“While these plans typically have lower benefit costs, they are not necessarily less costly to administer on a per-enrollee basis,” AHIP said. “Policymakers should recognize the unique nature of HSA plans to preserve consumers’ access to this important coverage option. ”

States with the highest levels of HSA enrollment were California, Texas, Ohio, Illinois, Florida, and Minnesota, according to AHIP.

Source:  MedPage Today

Skip to content