Employee Choice of a High‐Deductible Health Plan across Multiple Employers

Abstract

Objective. To determine factors associated with selecting a high-deductible health plan (HDHP) rather than a preferred provider plan (PPO) and to examine switching and market segmentation after initial selection. Data Sources/Study Setting. Claims and benefit information for 2005-2007 from nine employers in western Pennsylvania first offering HDHP in 2006. Study Design. We examined plan growth over time, used logistic regression to determine factors associated with choosing an HDHP, and examined the distribution of healthy and sick members across plan types. Data Extraction. We linked employees with their dependents to determine family-level variables. We extracted risk scores, covered charges, employee age, and employee gender from claims data. We determined census-level race, education, and income information. Principal Findings. Health status, gender, race, and education influenced the type of individual and family policies chosen. In the second year the HDHP was offered, few employees changed plans. Risk segmentation between HDHPs and PPOs existed, but it did not increase. Conclusions. When given a choice, those who are healthier are more likely to select an HDHP leading to risk segmentation. Risk segmentation did not increase in the second year that HDHPs were offered.Key Words. Consumer-driven health plan, risk segmentation, high-deductible health planIn response to the rising cost of health care, there has been increased interest in making the health care system more responsive to patients/consumers and in making consumers more responsible for the cost of health care. One result has been the growth of ''consumer-directed health care.'' Although consumerdirected health care has been defined many ways, the term commonly applies to an insurance product that has a high deductible with an associated health savings account (HSA) and a limit on out-of-pocket expenditures. This model was formalized under the Medicare and Medicaid Modernization Act and the r Health Research and Educational Trust

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