Self-Directed Health Plans Grow

An increasing number of employers are offering consumer-driven health plans, in which workers take more responsibility for covering their medical costs. But a majority of companies remain skeptical about the programs’ ability to lower costs, a study released Tuesday says.

Twenty-eight percent of companies surveyed this year said they were offering consumer-directed plans, up from 22% in 2005, according to a study of 434 employers by Aon Consulting and the International Society of Certified Employee Benefit Specialists, a nonprofit group.

However, a majority of employers either don’t believe the plans will lower costs or are uncertain of their effectiveness. Thirty percent said the plans would fail to save money, while 31% were unsure.

The specifics of consumer-driven plans vary. But generally, employees are given a fixed amount of money to pay for their healthcare costs. When the money has been spent, the employees become responsible for their bills until they hit a limit on out-of-pocket spending. The logic is that if employees have more of their money at risk, they will be more discerning buyers of heath care.

Forty-eight percent of companies said the plans would make employees better, more efficient purchasers, while 25% said they thought the plans would lead workers to forgo necessary care to save money.

Of the companies that don’t offer a plan, 40% said they planned to introduce one. Specifically, 12% planned a 2007 debut while 32% hadn’t decided on a date.

Bill Sharon, senior vice president at Aon Consulting and co-author of the study, said employers’ wariness was understandable because the plans had been around for only about five years and the scant data surrounding their effectiveness had been mixed.

“It is the nature of human resources executives to be skeptical about new things,” Sharon said. Of consumer-directed plans, he said, “There is not a lot of data to say they work.”