Americans Still Confident About Health Care, But Concerned About Cost

The recent U.S. Supreme Court decision upholding the constitutionality of the Patient Protection and Affordable Care Act (PPACA) appears to have had little impact on Americans’ confidence about their health care, according to a new report by EBRI.

“Public confidence about various aspects of today’s health care system has remained fairly level both before and after the passage of the health care reform law,” said Paul Fronstin, director of EBRI’s Health and Education Research Center and author of the report. “The Supreme Court decision did not change how people view the system.”

Data from the EBRI/MGA 2012 Health Confidence Survey (HCS) show that two years after passage of the Patient Protection and Affordable Care Act (PPACA), implementation of a number of provisions in the legislation, and three months after the Supreme Court upheld the law, Americans offer a diverse perspective: 28 percent consider the nation’s health care system to be “good,” 28 percent say “fair,” and 26 percent rate it “poor,” while 12 percent rate it very good and 5 percent say it is “excellent.”

Fronstin noted that, in contrast with the ratings for the health care system overall, Americans’ rating of their own health plans continues to be generally favorable—more than half of those with health insurance are extremely or very satisfied with their current plans, and a third are somewhat satisfied.

On the other hand, just 22 percent are extremely or very satisfied with the cost of their health insurance plans, and only 16 percent are satisfied with the costs of health care services not covered by insurance. Among those experiencing cost increases in their plans in the past year, 31 percent state they have decreased their contributions to retirement plans, and more than half have decreased their contributions to other savings as a result.

The report, “2012 Health Confidence Survey: Americans Remain Confident About Health Care, Concerned About Costs, Following Supreme Court Decision,” is published in the September EBRI Notes, available online at www.ebri.org  The HCS examines a broad spectrum of health care issues, including Americans’ satisfaction with health care today, their confidence in the future of the health care system and the Medicare program, and their attitudes toward health care reform.

Satisfaction Levels Rising For Consumer-Driven Health Plans, Slipping for Traditional Plans

Satisfaction levels are rising among people enrolled in “consumer-driven” health plans, while they are declining among those in traditional health plans, according to a new report by EBRI.

However, traditional-health plan enrollees remained more likely than CDHP or HDHP (high deductible health plan) enrollees to be extremely or very satisfied with their overall plan. The EBRI report notes that dissatisfaction with out-of-pocket costs may be driving more recent satisfaction trends.

“Similar to overall rates, satisfaction rates for out-of-pocket costs appear to be trending downward among those with traditional coverage and upward for those with consumer-driven plans,” said Paul Fronstin, director of EBRI’s Health Research and Education Program and author of the report.

The findings are from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey (CEHCS), an online survey that examines issues surrounding consumer-directed health care, including the cost of insurance, the cost of care, satisfaction with health care, satisfaction with health care plans, reasons for choosing a plan, and sources of health information. EBRI’s report also incorporates findings from earlier years of the survey to provide a time-series of results.

The press release is online here. The full report, published in the August 2012 EBRI Notes, is online here.

Those in Consumer-driven Health Plans More Educated, Healthier, Wealthier

Those enrolled in “consumer-driven” health plans tend to have higher incomes, higher educational levels, and report better health behavior than do those in traditional health plans, according to a new report by EBRI that examines trends over the 2005–2011 period.

Consumer-driven health plans (CDHPs) generally consist of high-deductible health plans (HDHP) with either a health reimbursement arrangement (HRA) or Health Savings Account (HSA). As of 2011, roughly 21 million individuals, representing about 12 percent of the market, were either in a CDHP or an HSA-eligible health plan.

The full report, “Characteristics of the Population With Consumer-Driven and High-Deductible Health Plans, 2005–2011,” is published in the April 2012 EBRI Notes. The press release is online here.

Starting Small

Are CBO Estimates on the Future of Employment-Based

Coverage Under PPACA Moving Toward the Herd Mentality?

By Paul Fronstin, EBRI

Fronstin

Trends in employment-based coverage start with small numbers.

The Congressional Budget Office (CBO) recently reported that it had revised its estimates on the net number of people with employment-based health coverage downward in 2016. In March 2011, CBO reported that about 1 million fewer people would have employment-based health coverage due to enactment of the Patient Protection and Affordable Care Act (PPACA), but in March 2012 it revised that number to about 4 million. CBO also estimates there will be about 2 million fewer estimated enrollees in insurance exchanges, which are to take effect in 2014.

The net reduction in the number of people with employment-based coverage—about 2 percent of the total health insurance market—is actually a function of total gains and losses in coverage. As the CBO notes in a footnote for its 2019 estimates, as a result of PPACA, about 14 million fewer people are expected to have employment-based coverage (about 11 million individuals will lose access to employment-based coverage, and another 3 million will decline employment-based coverage and enroll in health insurance from a different source), while about 9 million will newly enroll in employment-based coverage under PPACA.

The Herd Mentality

A report from Avalere assessed the validity of differing estimates of the effect of PPACA on employment-based coverage. Its analysis concluded that the employment-based market will be fairly stable after 2014, when key PPACA coverage provisions go into effect. However, the most important statement in the report may be the following:

“While near-term changes in aggregate ESI [employer-sponsored insurance] rates are unlikely, longer-term erosion—over 10 to 20 years—is possible under certain circumstances. … if a few [emphasis added] large employers drop coverage after 2014, others could follow in a “me too” effect. Both of these scenarios are difficult to model, but should be considered.”

Various surveys suggest that a significant number of employers will follow the market:

  • In a June 2010 survey, Fidelity found that 26 percent of small employers and 36 percent of large employers would seriously consider eliminating health care if other employers did.
  • In September 2010, HR Policy Association reported that 80 percent of chief human resource officers surveyed said that other companies moving away from health coverage would influence their decision to offer coverage.
  • A June 2011 survey of very large self-insured employers by the Benfield Group found that 21 percent were highly likely and 49 percent somewhat likely to drop coverage if their industry competitors stopped offering health benefits.

The trend in sentiment in these surveys may be reflected in a recent Towers Watson/National Business Group on Health Employer Survey that found that between 2007 and 2011, the percentage of employers reporting that they were highly confident that they would be offering health benefits a decade later fell from 70 percent to 23 percent.

The CBO seems to capture such a dynamic in its sensitivity analysis. CBO indicates that variation of estimates in employment-based coverage ranges from a net loss of 20 million to a net gain of 3 million by 2019. In fact, a number of surveys have also found that a small number of employers plan to drop coverage in 2014 or thereafter (see “Understanding Employer Surveys That Address the Future of Employment-Based Health Coverage,” online here.

As noted earlier, the most important take-away from this may be a reminder that trends in employment-based coverage start with small numbers. The movement away from defined benefit pension plans to defined contribution (401(k)-type) retirement plans did not happen overnight: It began with a mere 1 percentage point drop, between 1980–1981.  Neither did the movement to managed care, to consumer-driven health benefits, nor the movement away from providing retiree health benefits.

These changes took years, some would say decades, to play out. There is no reason to believe that 2014 will look much different from 2013 or 2011 in terms of whether or not employers offer health coverage.

What may be more important is the percentage of employers offering health coverage in 2020, or 2025.

Employer Contributions to Health Accounts Falling as Individual Contributions Rise

Enrollment in health savings accounts (HSAs) and heath reimbursement arrangements (HRAs) continues to grow, but contribution patterns to these account-based health plans are changing, according to a new report from the nonpartisan Employee Benefit Research Institute (EBRI).

Collectively, HSAs and HRAs are known as “consumer-driven” health plans. According to the latest EBRI/MGA Consumer Engagement in Health Care Survey, there was $12.4 billion in HSAs and HRAs, spread across 8.4 million accounts in 2011. This is up from 2006, when there were 1.3 million accounts with $873.4 million in assets, and 2010, when 5.4 million accounts held $7.3 billion in assets. This growth reflects the increasing number of employers that offer these account-based health plans.

The EBRI survey found that about two-thirds of workers with an HRA or HSA reported that their employer contributed to their account in 2011, a level that has remained steady since 2006. However, employer contribution levels have declined for some enrollees.

Specifically, for those with employee-only coverage in these plans, annual contributions from their employer have fallen since 2008: The percentage reporting that their employer contributed $1,000 or more to the account dropped from 37 percent in 2008 to 24 percent in 2011. Employer contributions of $1,000 or more to those with family coverage remained steady at 64 percent, EBRI found.

By contrast, individuals’ contributions to HSA plans have increased: the percentage contributing $1,500 or more increased from 21 percent in 2006 to 44 percent in 2011.

The full report is published in the February 2012 EBRI Notes, online here. The press release is online here.

1 in 5 Older Americans Cutting Back on Health Care to Save Money

More than 20 percent of Americans age 50 or over report saving on health costs by switching to cheaper generic drugs, getting free samples, stopping pills or reducing dosages, and nearly as many skip or postpone doctor appointments for the same reason, according a new report by EBRI.

The data suggest that spending by those near or in retirement declines to match income, even when it means giving up real needs.

“We know that consumption tends to fall with age, but it’s difficult to measure whether falling consumption is voluntary,” said Sudipto Banerjee of EBRI, author of the study. “However, we found evidence that a significant segment of the older population may be making spending adjustments to their health care in order to save money.”

The study is based on data from the 2009 Internet Survey of the Health and Retirement Study (HRS). The full report is published in the January 2012 EBRI Notes, “Spending Adjustments Made By Older Americans to Save Money,” online at here.

EBRI Survey Finds Consumer-Driven Health Plans Remain Small But Continue to Grow

The ranks of people enrolled in either a consumer-driven health plan (CDHP) or a high-deductible health plan (HDHP) reached 22 million in 2010, according to a report released today by the nonpartisan Employee Benefit Research Institute (EBRI). Participation in these account-based health care plans is low, but continues to grow, EBRI finds in its sixth annual Consumer Engagement in Health Care Survey.

The EBRI report found that enrollment in CDHPs rose to 5 percent of the privately insured population (5.7 million people) in 2010, up from 4 percent in 2009. Enrollment in HDHPs increased to 14 percent of the privately insured population (17.2 million people) in 2010, up from 13 percent in 2009.

The data are based on the 2010 Consumer Engagement in Health Care Survey (CEHCS), which analyzed the behavior and attitudes of 4,509 adults ages 21–64 with private health insurance coverage.

The survey is conducted by EBRI and Mathew Greenwald and Associates. The report, “Findings From the 2010 EBRI/MGA Consumer Engagement in Health Care Survey,” is published in the December 2010 EBRI Issue Brief, online here. The press release is online here.