NCPA - National Center for Policy Analysis

More Employers Embrace High-Deductible Health Plans to Pare Costs

November 27, 2012

Consumer-directed health plans are gaining popularity as many employers are beginning to offer them in an effort to reduce health care costs, says the Los Angeles Times.

  • Employers prefer consumer-directed health plans because they are about 20 percent cheaper than preferred-provider organization (PPO) plans.
  • The cost of a high-deductible medical plan with a health savings account is $7,833 annually per employee compared to $10,007 for a PPO plan.
  • Thirty-six percent of large employers offer consumer-directed, high-deductible health plans, compared to only 14 percent five years ago.
  • Enrollment in those plans has risen to 16 percent of all covered employees, compared to only 5 percent in 2007.

Under new federal rules, the minimum deductible for these plans with a health savings account is $2,500. Because of the shift, health benefit costs per employee have only risen by 4.1 percent, the smallest increase since 1997. Employers nationwide expect a 5 percent increase in health benefit costs next year.

Some experts contend that the lower costs are a result of employers shifting more of the costs on to workers and the patients postponing care and out-of-pocket medical expenses.

Source: "More Employers Embrace High-Deductible Health Plans to Pare Costs," Los Angeles Times, November 14, 2012.


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