Employees are better managing their usage of health care benefits when involved in the decision-making process and spending their own funds, a new two-year study of 430,000 CIGNA accounts indicates. This is good news for employees and employers as second year costs for coverage are less due to reduced claims and usage. It is even better news for agent/brokers who are starting to see the benefits of selling CDHP products.
The massive CIGNA insurance study confirms trends spotted by experts over the past three years as the number of health savings accounts (HSAs) and health reimbursement accounts (HRAs) have proliferated. These are two of the three major components of consumer-directed health care. The new "2007 CIGNA Choice Fund Experience Study" reports that usage and costs of consumer-driven accounts is cut in half for the same benefits. Member out-of-pocket costs show similar declines in the second year, the study shows. "Medical cost trend for CIGNA health care consumer driven health plan (CDHP) members is less than half that of CIGNA's HMO and PPO plan members, and CIGNA CDHP members' cost savings compounded over time - even as members used more preventive services relative to traditional plan members," according to the study.
Among the findings that can be used by agent/brokers in their presentation to potential clients are:
The study is another indication that CDHP accounts will be a major factor in employer-sponsored programs as 2008 plans are implemented. One of the key components in the transition to CDHP offerings is education. Increasingly, agent/brokers are utilizing online tools such as Fontis Health to help clients educate their employees. One prediction, made at a recent conference, is that more than 20 percent of all companies offering CDHP health care options will have individualized online systems in place by 2009.
According to findings from an ongoing Information Strategies Incorporated (ISI) study, savings for companies in terms of usage and acceptance increased more than 15 percent when online tools are used. Seemingly confirming this trend, smaller firms responding to ISI's annual health care study said they were more comfortable with their new plans when the educational tools provided by either the agent, insurance company or financial institutions had some form of individualized account management tool.
Interestingly, when asked about the role of agent/broker in the process, more than two-thirds (69 percent) indicated they wanted more participation. The same survey indicated that more than 35 percent of companies responding would have some form of CDH plan as either a full replacement or option in 2008.
Considering that individuals and companies are seeing the advantages of CDHPs in terms of monies expended and savings in premiums, agent/brokers who have not decided to jump on this bandwagon, will find next year to be an interesting time.
*For further information or to contact this author, please use the forum below.
The massive CIGNA insurance study confirms trends spotted by experts over the past three years as the number of health savings accounts (HSAs) and health reimbursement accounts (HRAs) have proliferated. These are two of the three major components of consumer-directed health care. The new "2007 CIGNA Choice Fund Experience Study" reports that usage and costs of consumer-driven accounts is cut in half for the same benefits. Member out-of-pocket costs show similar declines in the second year, the study shows. "Medical cost trend for CIGNA health care consumer driven health plan (CDHP) members is less than half that of CIGNA's HMO and PPO plan members, and CIGNA CDHP members' cost savings compounded over time - even as members used more preventive services relative to traditional plan members," according to the study.
Among the findings that can be used by agent/brokers in their presentation to potential clients are:
- CDHP medical cost trends in terms of rising premium rates are less than half those for HMOs and PPOs.
- Medical costs for first-year CIGNA CDHP members were more than 12 percent lower and were 5 percent lower for second year members relative to CIGNA HMO and PPO members. CIGNA CDHP medical trend for second year members was 4.4 percent compared with a 9.8 percent trend for CIGNA's traditional plan members.
- Member out-of-pocket costs were similar: First year HRA cost share percentage (of member paid costs) was similar to traditional plans while second year CDH member cost share percentages were 4 percent less for both HRA and HSA members.
- Use of preventive care increased: First-year member preventive visits increased and second-year member visits were significantly higher than those among traditional plan members.
- Recommended care compliance remained constant: CIGNA Choice Fund members continued to receive recommended care at similar compliance rates as traditional plan members.
- Medication compliance improved, while costs decreased: Use of maintenance medications that support chronic conditions increased while costs decreased over the period for CIGNA Choice Fund members.
The study is another indication that CDHP accounts will be a major factor in employer-sponsored programs as 2008 plans are implemented. One of the key components in the transition to CDHP offerings is education. Increasingly, agent/brokers are utilizing online tools such as Fontis Health to help clients educate their employees. One prediction, made at a recent conference, is that more than 20 percent of all companies offering CDHP health care options will have individualized online systems in place by 2009.
According to findings from an ongoing Information Strategies Incorporated (ISI) study, savings for companies in terms of usage and acceptance increased more than 15 percent when online tools are used. Seemingly confirming this trend, smaller firms responding to ISI's annual health care study said they were more comfortable with their new plans when the educational tools provided by either the agent, insurance company or financial institutions had some form of individualized account management tool.
Interestingly, when asked about the role of agent/broker in the process, more than two-thirds (69 percent) indicated they wanted more participation. The same survey indicated that more than 35 percent of companies responding would have some form of CDH plan as either a full replacement or option in 2008.
Considering that individuals and companies are seeing the advantages of CDHPs in terms of monies expended and savings in premiums, agent/brokers who have not decided to jump on this bandwagon, will find next year to be an interesting time.
*For further information or to contact this author, please use the forum below.
