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POLICY/HEALTH PLANS: Yet more debatable data on CDHPs

HSC’s John Gabel (kind of a “neutral” in the debate) is out with a new study suggesting something that I think is true. The take up of CDHPs by workers offered them in a choice with other products (HMOs. PPOs) is slow. And that’s because they’re not being appropriately compensated with premium reductions in their take-home pay to off-set the much higher-deductibles.

And of course this goes back to how employees buy their health care in the first place—mostly unconsciously via their employers, not knowing the actual cost of their premiums. If you want a long lecture on why this makes employees poor purchasers of insurance, attend any Alain Enthoven Stanford Business School class.

The likely evolution of all this is that workers will find the deductibles and co-pays for their PPO and HMO products increasing to the level of the HDHPs pretty soon. That’s how employers will “get out” of health care benefits—until the possible day when they all look at each other and say “OK let’s drop them totally and let the government take over.” Which is what they all want, but no one is quite ready to make the first move.

But because the HDHP is becoming an evolution of the PPO product that already exists, the argument will about choice will soon be moot. Karen Ignagni may well say that all (or actually 30%) the new small employer HDHP buyers were uninsured, but it’s pretty obvious that most (70%) of the new HDHP wielding employees were people with PPOs before who are being forced into HDHPs by their employers. And that’s certainly what’s happening with Intel and other larger employers who are “offering” HDHPs.

However this news release is most remarkable for this quote from Ignagni: “Ignagni said the plans are popular in certain niches but that it was too soon to say if they will gain wide acceptance.” She’s actually telling the truth! Mark that one down in your diary.

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