All is not right in the world of consumer-directed healthcare. It's just one story, but this piece in the Des Moines Register should be a wake-up call for those who think the future of healthcare cost containment lies with these vehicles.
People don't want them.
There, I said it. And it pains me to do so.
A more nuanced way to put it is that people don't want them if a company's clearly using them to offload risk and the plans are clearly inferior to what employees are already getting.
The very reason people are no longer opting for them in large numbers is that they're smart enough to recognize that in many cases, they're not getting enough of a return for the risk they're taking on. Back when these plans got their start, with hungry young companies like Lumenos, proponents were careful to sell them to employers not necessarily as a cost reduction tool only, but as a way to ultimately bring down the cost of healthcare over time. To that end, they encouraged employers to make sure to entice employees to make the shift by generously contributing the savings versus the traditional health plan to employees' accompanying health savings account.
On a macroeconomic basis, these plans have had an effect on the rising cost of healthcare. Healthcare cost increases have moderated in recent years. Consumer-directed healthcare is a part of that. But what we're seeing now masquerading as consumer-directed healthcare is anything but.
Transparency was to be the key. Employee perceptions—in other words, the perception that the company wasn't just passing off risk to the employee—was critical. Turns out that over time, many companies resisted or even refused to make contributions to the HSAs—opting instead to offer the much more restrictive health reimbursement account mechanism, or simply encouraging employees to contribute to HSAs on their own. That's not consumer-directed healthcare. It's simply offering a high-deductible health plan—also known as old-fashioned benefit cutting.
Gee, thanks for nothing.
Years later, those young, hungry companies have been acquired by the behemoths of the insurance industry. Anthem-Wellpoint bought Lumenos, for example. These plans have morphed from the goal of reducing the cost of healthcare to the notion of maximizing the profit of the insurers and the companies who buy their products. That's no crime, but at least shoot straight with us.
It's just one story in a small-population state, but it's illustrative of the problems employers are having with getting employee acceptance of these plans. And Iowa is a place where analysts expected CDHP to get strong acceptance—from companies with large bases of manufacturing employees who might be interested in taking on more of the management of their own healthcare. The Register story says Wellpoint blames the slow economy for employers deciding against switching to or offering the plans to their employees. Excuse me, but aren't the plans cheaper than traditional insurance? Shouldn't a slower economy increase interest in these plans?
The real reason, I suspect, is that employees are wise to these plans as they are in practice, not as they are in theory—and they don't want them.
Here's my suggestion: Give me the same tax break the companies get and let me choose whether to take what the company offers or go out and find my own insurance. Oh, and pay me the difference that the company currently spends on my health insurance premium. That would be too straightforward. And it won't happen.
So yet another silver bullet that would solve the problem of healthcare inflation now seems like a lead dud.