Private HIX Show the Way to Transformed Benefits
Okay, if people are willing to give up some benefits to lower their premiums, what else are they willing to trade? Here are some of the survey highlights:
- Employees are most likely to trade a higher deductible for premium savings. Some 83% of respondents say they would pay a higher deductible to save $900 annually in premium costs. Almost three-quarters would pay a higher deductible to save as little as $300 on their premiums.
- Three-quarters say they would pass on wellness benefits to lower their premium.
- Employees are much less likely to forgo provider choice, with only 26% saying they would be willing to have less network flexibility in return for a lower premium.
- Only 23% are willing to trade a lower premium for higher copayments or coinsurance, which are very visible to consumers because they have to pay every time they get service at a pharmacy, a clinic, hospital, physician's office, etc.
What happens to the savings? Defined contribution also permits employees to cash out once they have purchased their insurance. So if an employee has $2,000 to purchase health insurance and only spends $1,500, then the remaining $500 is "found money"—albeit taxable. But 57% of survey respondents say they would not take the cash-out option, and instead would spend those dollars to purchase ancillary health benefits such as vision and dental coverage, and even life insurance and disability benefits.
We are talking billions of leftover cash—what Birhanzel terms "discretionary premium dollars." Accenture estimates this new pool of money will grow to $4 billion by 2018.
"We see interesting growth opportunities in this ancillary benefit space that didn't really exist before for this population because it didn't have the opportunity to make these trade-offs," says Birhanzel.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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