AAPPO Study Shows Consumer Directed Health Plan Enrollment Surged By 19 Percent In 2012

WASHINGTON, June 17, 2013 /PRNewswire/ -- Enrollment in consumer-directed health plans (CDHPs) grew by 19 percent in 2012, increasing from 33 million in 2011 to 39 million last year, according to an analysis of the Mercer National Survey of Employer Sponsored Health Plans commissioned by the American Association of Preferred Provider Organizations (AAPPO).

CDHPs provide consumers with more control over the cost of their health care and ensure reliable coverage while lowering employers' expenditures.  Examples of CDHPs include health savings accounts, health reimbursement arrangements and flexible spending accounts.

Among the survey's findings:

• 36 percent of large employers (500 of more employees) offered CDHPs in 2012, up from 32 percent from the year before.
• 22 percent of small employers (under 499 employees) offered employees a CDHP option, up from 20 percent in 2011.
• 59 percent of the nation's largest employers (20,000+ employees) offered CDHPs in 2012, up from 48 percent the year before. Additionally, 62 percent of these employers expect to offer CDHPs in 2013 and 68 percent by 2018.

Sixteen percent of all employees with employer-sponsored plans chose CDHPs in 2012 – showing a larger enrollment growth than any other type of insurance plan. This trend corresponds with a slight, but steady decline in HMOs over that same period.

"As our economy continues to stumble and the fate and feasibility of the Affordable Care Act remains in question, employers of all sizes continue to seek innovative ways to reduce what they spend to cover their employees. Given the cost savings inherent in the consumer-directed model, it's clear that employers -- especially our largest ones -- are increasingly looking to CDHPs to do that," said Karen Greenrose, AAPPO President and CEO. "Consumer-driven health plans, which are predominantly built on well-established PPO networks, offer the affordability, choice, access and stability that employers and consumers alike are looking for in this uncertain environment."

Last year's increase continues a steady growth trend that started in 2008 (7 percent increase) and continued through 2011 (13 percent increase). Survey results show that the trend is likely to continue in the near future as well, with 40 percent of employers of all sizes expecting to offer a CDHP in the next five years. 

"It's obvious from the numbers AAPPO released today that employers of all sizes in the healthcare marketplace continue to look to the inherent cost cutting advantages of the CDHP/HSA model when seeking coverage options for their employees," said Congressman Marsha Blackburn (R-TN). "Patients want more personal control over their healthcare decisions, and every employer is seeking affordability and stability in coverage costs. CDHPs and the PPO networks they are built on continue to meet that demand."

Of the 246 million Americans that the U.S. Census Bureau estimates have private or government health insurance, an estimated 200 million were enrolled in PPO-based plans, including point-of-service and consumer-driven plans. HMO enrollees represented the remaining 44 million (or roughly 18 percent), with the remainder in traditional indemnity plans.

To view the entire study, please visit here.

About the American Association of Preferred Provider Organizations (AAPPO) 
Founded in 1983, AAPPO (www.aappo.org) is the leading national association of preferred provider organizations (PPOs).  PPOs put control for medical decisions in the hands of the physician and patient, resulting in easy access to the right care, provided by the right doctor, at the right time. AAPPO creates a forum for discussion and dissemination of PPO best practices.

SOURCE American Association of Preferred Provider Organizations