A Prescription for Health Care?

THE SOURCE: “Growth of Consumer-Directed Health Plans to One-Half of All Employer-Sponsored Insurance Could Save $57 Billion Annually” by Amelia M. Haviland, M. Susan Marquis, Roland D. McDevitt, and Neeraj Sood, in Health Affairs, May 2012.

Health care costs are sucking the country dry. One remedy gaining support is consumer-directed health insurance plans, in which individuals accept high deductibles in return for relatively low monthly premiums. Many variants offer health care savings accounts that allow plan holders to store money tax-free to help pay for the increased out-of-pocket medical expenses. Enrollment in such plans expanded from four percent of employer-sponsored enrollment in 2006 to 13 percent in 2010. Big savings could be in the offing if the trend continues, report Carnegie Mellon University public policy and statistics professor Amelia M. Haviland and her coauthors.

Consumer-directed plans could eventually constitute 50 percent of employer-sponsored enrollment, in part because the 2010 Affordable Care Act encourages their growth. Haviland and her colleagues looked at the recent experience of plan users to estimate the effect. What they found will thrill budget hawks: Such a shift would reduce health care spending $57 billion per year. That’s equal to seven percent of all costs for the employer-sponsored population.

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