• by Kevin Ransom , April 6, 2007

Consumer-driven health care plans (CDHC) are still suffering from low selection rates when they are offered to employees as one option among many, according to a report released by The Conference Board, the international business research organization.

However, employers still expect a strong growth rate among such plans, says Jon Gabel, author of The Conference Board report and senior fellow at the National Opinion Research Center.

A consumer-driven health care plan is a high-deductible health plan that is presented along with a tax-advantaged spending account. Presently, two types of plans meet these criteria--health savings accounts (HSAs) and health reimbursement accounts (HRAs).

A primary reason consumers are not selecting CDHCs is that the plans aren't communicating their benefits in a clear-enough fashion--leaving the consumer confused, says Gabel.

"These plans don't sell themselves. Some of them are difficult to understand--they're presenting a whole new way of thinking about health insurance, with their savings accounts, and deductibles. So if people don't understand them, they're not going to buy them."

To change that, employers and health plans have to conduct early and repeated face-to-face meetings with employees.

"When employers roll out these plans, they have to invest a lot more than they've been investing in education and communication," stresses Gabel. "Interviews were done with companies who were successful in getting workers to sign up for these plans, and even they said they wished they had invested more in communication and education."

Gabel observes that employers also need to improve the quality of information available to employees by requiring the pooling of medical claims data from a number of health plans. The plans also have to beef up and standardize quality measures.

As of 2005, about 2.4 million U.S. (non-federal) workers--or 3.5% of employees with employer-offered insurance plans--were enrolled in a consumer-driven health care plan. At that time, a typical CDHC plan listed a deductible of approximately $1,900--and an employer contribution of $792 in HRA plans and $553 in HSA plans.

Employees who had other health care plans prior to enrolling in CDHC plans use their plans less often than other employees, notes Gabel. They also tend to be better educated, have higher incomes and are more likely to be males.

Most CDHC plan Web sites have improved the accuracy and quality of information offered to potential customers, according to the report.