With Below Average Cost, Increasing Enrollment, CDHPs Have Big Impact

With Below Average Cost, Increasing Enrollment, CDHPs Have Big Impact

When most experts think of group healthcare plans, Preferred Provider Organization (PPO) plans largely come to mind—though higher cost, they dominate the market in terms of plan distribution and employee enrollment. But Consumer-Directed Health Plans (CDHPs) have made surprising gains. Despite slight cost increases, CDHP costs are still below average and prevalence and enrollment in these plans continues to grow in most regions—a main reason why it was one of the top 7 survey trends recently announced.
In 2017, 28.6% of all plans are CDHPs. Regionally, CDHPs account for the following percentage of plans offered:
Prevalence of CDHP Plans
CDHPs have increased in prevalence in all regions except the West. The North Central U.S. saw the greatest increase (13.2%) in the number of CDHPs offered. Looking at size and industry variables, several groups are flocking to CDHPs:
Regional offering of CDHPs
When it comes to enrollment, 31.5% of employees enroll in CDHP plans overall, an increase of 19.3% from 2016, after last year’s stunning increase of 21.7% from 2015. CDHPs see the most enrollment in the North Central U.S. at 46.3%, an increase of 40.7% over 2016. For yet another year in the Northeast, CDHP prevalence and enrollment are nearly equal; CDHP prevalence doesn’t always directly correlate to the number of employees who choose to enroll in them. Though the West held steady in the number of CDHPs offered, there was a 2.6% decrease in the number of employees enrolled. The 12.6% increase in CDHP prevalence in the North Central U.S. garnered a large 40.7% increase in enrollment. CDHP interest among employers isn’t surprising given these plans are less costly than the average plan. But like all cost benchmarks, plan design plays a major part in understanding value. The UBA survey finds the average CDHP benefits are as follows:
CDHP benefits
By Bill Olson
Originally Published By United Benefit Advisors

Best and Worst States for Group Health Care Costs

Best and Worst States for Group Health Care Costs

Employer-sponsored health insurance is greatly affected by geographic region, industry, and employer size. While some cost trends have been fairly consistent since the Patient Protection and Affordable Care Act (ACA) was put in place, UBA finds several surprises in its latest Health Plan Survey. Based on responses from more than 11,000 employers, UBA recently announced the top five best and worst states for group health care monthly premiums.
The top five best (least expensive) states are:
1) Hawaii
2) Idaho
3) Utah
4) Arkansas
5) Mississippi
Hawaii, a perennial low-cost leader, actually experienced a nearly seven percent decrease in its single coverage in 2016. New Mexico, a state that was a low-cost winner in 2015, saw a 22 percent increase in monthly premiums for singles and nearly a 30 percent increase in monthly family premiums, dropping it from the “best” list.
The top five worst (most expensive) states are:
1) Alaska
2) Wyoming
3) New York
4) Vermont
5) New Jersey
The UBA Health Plan Survey also enables state ranking based on the average annual cost per employee. The average annual cost per employee looks at all tiers of a plan and places an average cost on that plan based on a weighted average metric. While the resulting rankings are slightly different, they also show some interesting findings.
The 2016 average annual health plan cost per employee for all plan types is $9,727, which is a slight decrease form the average cost of $9,736 in 2015. When you start to look at the average annual cost by region and by state, there is not much change among the top from last year. The Northeast region continues to have the highest average annual cost even with the continued shift to consumer-driven health plans (CDHP). In 2016, enrollment in CDHPs in the Northeast was 34.9 percent, surpassing those enrolled in preferred provider organization (PPO) plans at 33 percent. Even with the continued shift to CDHPs, the average annual costs were $12,202 for New York, which remained the second-highest cost state, followed by $12,064 for New Jersey, and rounding out the top five, Massachusetts and Vermont flip-flopped from 2015 with Massachusetts at $11,956 and Vermont at $11,762.
As was the case in 2015, Alaska continues to lead all states in average health plan costs, topping New York by more than $1,000 per employee, with an average cost of $13,251. While year-over-year the average cost for Alaska only increased 3.35 percent, the gap increased to 36.2 percent above the national average of $9,727.
Keeping close to the national average increase, the top five states all saw a year-over-year increase of less than 4.5 percent. Unfortunately, even at a modest increase, the one thing that the top five have in common is that they all are more than 20 percent above the national average for health plan costs per employee.

By Matt Weimer, Originally Published By United Benefit Advisors