NCPA - National Center for Policy Analysis


July 31, 2007

The savings that come with high-deductible consumer-driven health insurance plans are enticing a growing number of small businesses to offer them to their workers, according to the Chicago Tribune.


  • At Family Medicine for McHenry County (near Chicago), 11 out of 12 employees on the group's insurance moved this year to a plan with a $1,500 deductible for single coverage.
  • The move cut premiums by 25 percent, and Family Medicine is self-insuring employees' deductibles, so they won't incur the out-of-pocket costs themselves.
  • Overall, in the Chicago area, about 26 percent of midsize employers surveyed offer a consumer-driven health plan, and 27 percent are considering offering one next year, according to a survey by GCG Financial.

Employee benefit firms, such as GCG Financial, see consumer-driven plans as one way to slow the rate of health-insurance cost increases, which hit 6 percent in the Chicago area this year even after plan changes designed to keep premiums down. 

"A lot of employers have made benefit-reduction changes to where they're not comfortable continuing to do that," said Jeff Kolker, vice president of employee benefits at GCG.  "We're trying to take a creative approach to bring in an alternative solution," namely consumer-driven plans with high deductibles that can be paid for with dollars from Health Savings Accounts.  Money in HSAs that isn't used during the year rolls over to the next year, and employees earn interest on the funds in the account, he said.  So the incentive is to spend less on health care.

Source: Ann Meyer, "'Consumer' plans fight health costs," Chicago Tribune, July 30, 2007.


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