Enrollment In Consumer Directed Health Plans Grew By 18 Percent In 2011

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American Association of Preferred Provider Organizations (AAPPO)

Jun 06, 2012, 11:12 ET

Large Employers Flock to CDHPs at Record Pace, AAPPO Study Shows

WASHINGTON, June 6, 2012 /PRNewswire-USNewswire/ -- Enrollment in Consumer-directed health plans (CDHPs) grew by 18 percent in 2011, up from 28 million in 2010 to 33 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).

Thirteen percent of all employees with employer-sponsored plans chose CDHPs in 2011 – showing an enrollment growth that no other type of insurance plan saw that year. This trend corresponds with a slight, but steady decline in HMOs over that same period.

Last year's increase continues a steady growth trend that started in 2008 (7 percent) and continued through 2010 (11 percent). Survey results show that the trend is likely to continue in the near future as well, with 48 percent of employers of all sizes expecting to offer a CDHP in the next 5 years.

"Our stagnant economy combined with the uncertain fate of the Affordable Care Act has forced employers of all sizes 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. "In today's tough environment, CDHPs -- which are predominantly built on PPO networks -- offer the affordability, choice and access that employers and consumers alike are looking for."

Among large employers – those with 500 of more employees – offerings of CDHPs jumped from 23 to 32 percent from 2010 to 2011, the biggest one-year increase seen so far. Small employers (under 499 employees) are historically the least likely to offer their employees a CDHP option, but even that sector grew from 16 to 20 percent in the last year. Forty-eight percent of the nation's largest employers (20,000 + employees) offered CDHPs in 2011, with 54 percent expecting to offer them in 2012.

CDHPs, which provide consumers with more control over the cost of their health care, ensure reliable coverage while lowering employers' outlays.

"From the numbers AAPPO released today, it's obvious that the CDHP/HSA model is filling a significant void in the marketplace," said Tennessee Representative and Chairman of the House Education and Workforce Health Subcommittee, Phil Roe. "As a physician, I know that patients are demanding greater personal control over their healthcare decisions, and their employers want more affordable and manageable costs. CDHPs – and the PPO networks they are built on – are clearly meeting that demand "

Of the 256 million Americans that the U.S. Census Bureau estimates have private or government health insurance, 204 million were enrolled in PPO-based plans, including point-of-service and consumer-driven plans. HMO enrollees represented the remaining 52 million (or roughly 19 percent).

To view the entire study, please visit www.aappo.org.

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 (AAPPO)