Workers prefer HMOs, PPOs

December 02, 2006|By Bloomberg News

WASHINGTON -- Most American workers prefer traditional health plans to a new system aimed at giving consumers greater control, as well as responsibility, for their medical care, a study from a Washington research group said yesterday.

Given a choice, only 19 percent of employees would choose a so-called consumer-directed plan over health-maintenance organization and preferred-provider organization plans, according to the Center for Studying Health System Change.

About 2.7 million Americans, or 4 percent of those who obtain health insurance through their employers, are enrolled in the new plans, which offer tax benefits and more treatment choices in exchange for greater out-of-pocket expenses and risk.

Health insurers and many employers endorse the new plans' potential to trim U.S. health spending.

"Consumer-directed plans are most appealing to people who have money in the bank, who feel confident in the health care marketplace, who feel in control of their life," said Jon R. Gabel, author of the study and the center's vice president. "That is not most people."

Under the plans, created by Congress in 2003, out-of-pocket expenses average $1,459 for a single person. Lower-income workers, those less comfortable making financial decisions and people who don't move easily through the medical system find the arrangement disconcerting, Gabel said in a telephone interview.

About 40 percent of workers who end up in a consumer- directed plan weren't given an alternative by their employers, the study found.

"In the 1990s the phrase was, `forced into an HMO,'" he said. "In this case, these employees were forced into a consumer-directed plan."

The use of the new plans by employees hasn't been as high as insurers and employers would have liked, Gabel said. "If you're somebody who consumes a lot of health care and you've got a lot of consumer debt, they're not appealing," he said.

The finding isn't a surprise, said Barry Barnett a New York-based principal with PricewaterhouseCoopers, the world's largest accounting firm. "Clearly, employees will not embrace consumer-directed plans."

Instead, they would prefer a health-maintenance organization plan that insulates them from risk by covering all services, except for a co-pay.

Employers are no longer willing to buffer employees from the rising cost of health care and want their workers to share the load, Barnett said in a telephone interview.

"Employers in a global competitive environment are saying, `I can't carry this burden alone. I need to be competitive,'" he said.

A recent survey by Cigna Corp., the Philadelphia health insurer, demonstrated that employee health costs fell under consumer-directed health plans.

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