Consumer Driven Health Plans continue to show great results

Recent studies conducted by two of the largest U.S.-based health insurers indicate that employers sponsoring consumer-directed health plans have been substantially more successful in controlling medical costs than traditional HMO and PPO plans over the past several years.

Employees and dependents enrolled in one of Bloomfield, Conn.-based Cigna Corp.’s “Choice Fund” CDHPs reported an average 7% decrease in medical costs during their first year of enrollment, compared with an average 7% one-year increase among HMO and PPO enrollees, according to Cigna’s seventh annual Choice Fund Experience Study.

Cigna’s study, released last week, examined claim experiences among 1,900 client group plans covering more than 2.5 million individuals. Overall, Cigna said combined enrollment in its Health Reimbursement Arrangement and Health Savings Account CDHP programs grew by 26% in 2012.

Thousands in savings

Cumulatively, Cigna’s group CDHP clients saved approximately $1,300 per employee in the first year, the study found. Per-employee savings compounded among CDHP clients in each subsequent plan year, totaling $7,800 by the fifth year.

In a statement accompanying the study, Cigna President and CEO David Cordani said the lower medical costs reported by CDHP enrollees are attributable in part to that group’s higher rate of participation in health and disease management programs, as well as more frequent use of online pricing and quality-of-care rating indices.

Thirty-one percent of CDHP enrollees completed a health risk assessment in 2012, compared with 15% of HMO and PPO enrollees. Almost three-quarters of CDHP participants registered to use Cigna’s online health care pricing directories and decision-making tools, compared with 47% of HMO and PPO plan members.

Read more from Business Insurance.

About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
This entry was posted in Health, Health & Welfare and tagged . Bookmark the permalink.