Consumer-Directed Health Plans
Health Status, Spending, and Utilization of Enrollees in Plans Based on Health Reimbursement Arrangements Gao ID: GAO-10-616 July 16, 2010Consumer-directed health plans (CDHP) combine a high-deductible health plan with a tax-advantaged account, such as a health reimbursement arrangement (HRA), that enrollees can use to pay for health care expenses. In an effort to restrain cost growth, several employers, including the federal government through its Office of Personnel Management (OPM), have offered HRAs for several years. For enrollees in HRAs compared with those in traditional plans such as preferred provider organization (PPO) plans, GAO assessed (1) differences in health status, and (2) changes in spending and utilization of health care services. GAO analyzed data from two large employers--one public and one private--that introduced an HRA option in 2003. GAO compared changes in health spending and utilization before and after 2003 for enrollees who switched from a PPO into an HRA (the HRA group) with those who stayed in a PPO (the PPO group). At the time GAO made its data requests to each employer, 2007 data from the public employer and 2005 data from the private employer were the most current and complete data available. GAO also reviewed published studies that included an assessment of the health status, spending, or utilization of HRA and other CDHP enrollees compared with traditional plan enrollees. Results are not generalizable beyond the enrollees, health plans, and employers GAO reviewed and also cannot be compared between the public and private employers.
On average, enrollees in the HRA groups of both employers GAO reviewed spent less and generally used fewer health care services before they switched into the HRA in 2003 than those who remained in the PPO, suggesting that the HRA groups were healthier. Average annual spending per enrollee for the public employer's HRA group was $1,505 lower than the PPO group for the 2-year period prior to switching. (Spending for the public employer was based on analysis of both medical and pharmacy claims.) Likewise, the private employer's HRA group spent $566 less per enrollee for the 2-year period prior to switching than the PPO group (we were not able to examine pharmacy claims for the private employer). Similarly, of the 21 studies GAO reviewed that assessed the health status of HRA and other CDHP enrollees, 18 found they were healthier than traditional plan enrollees based on utilization of health care services, self-reported health status, or the prevalence of certain diseases or disease indicators. Other demographic differences may also explain spending and utilization differences including that policyholders in the HRA group were younger than those in the PPO group. Spending and utilization for enrollees in HRAs generally increased by a smaller amount or decreased compared with those in traditional plans that GAO reviewed. (1) Public employer. From the 2-year period before switching--2001 to 2002--to the 5-year period after switching--2003 to 2007--average annual spending for the HRA group increased by $478 per enrollee compared with $879 for the PPO group. This smaller increase for the HRA group was partially driven by decreases in spending for prescription drugs. Additionally, average annual utilization of services per enrollee increased by a smaller amount or decreased for the HRA group compared with the PPO group for six out of eight services GAO reviewed. (2) Private employer. From the 2-year period before switching--2001 to 2002--to the 3-year period after switching--2003 to 2005--average annual spending for the HRA group increased by $152 per enrollee compared with $206 for the PPO group. This smaller increase for the HRA group was partially driven by smaller increases in spending for physician office visits and decreases in spending for emergency room services. Additionally, average annual utilization of services per enrollee increased by a smaller amount or decreased for the HRA group compared with the PPO group for four out of seven services GAO reviewed. Similarly, GAO's review of published studies found that seven out of eight students that examined spending and controlled for differences in health status or other characteristics reported lower spending among HRAs and other CDHP enrollees relative to traditional plans. OPM did not provide comments on the draft report. Representatives of the two employers whose health plans GAO reviewed did not comment on the draft report.
GAO-10-616, Consumer-Directed Health Plans: Health Status, Spending, and Utilization of Enrollees in Plans Based on Health Reimbursement Arrangements
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
July 2010:
Consumer-Directed Health Plans:
Health Status, Spending, and Utilization of Enrollees in Plans Based
on Health Reimbursement Arrangements:
GAO-10-616:
GAO Highlights:
Highlights of GAO-10-616, a report to congressional requesters.
Why GAO Did This Study:
Consumer-directed health plans (CDHP) combine a high-deductible health
plan with a tax-advantaged account, such as a health reimbursement
arrangement (HRA), that enrollees can use to pay for health care
expenses. In an effort to restrain cost growth, several employers,
including the federal government through its Office of Personnel
Management (OPM), have offered HRAs for several years.
For enrollees in HRAs compared with those in traditional plans such as
preferred provider organization (PPO) plans, GAO assessed (1)
differences in health status, and (2) changes in spending and
utilization of health care services. GAO analyzed data from two large
employers”one public and one private”that introduced an HRA option in
2003. GAO compared changes in health spending and utilization before
and after 2003 for enrollees who switched from a PPO into an HRA (the
HRA group) with those who stayed in a PPO (the PPO group). At the time
GAO made its data requests to each employer, 2007 data from the public
employer and 2005 data from the private employer were the most current
and complete data available. GAO also reviewed published studies that
included an assessment of the health status, spending, or utilization
of HRA and other CDHP enrollees compared with traditional plan
enrollees. Results are not generalizable beyond the enrollees, health
plans, and employers GAO reviewed and also cannot be compared between
the public and private employers.
What GAO Found:
On average, enrollees in the HRA groups of both employers GAO reviewed
spent less and generally used fewer health care services before they
switched into the HRA in 2003 than those who remained in the PPO,
suggesting that the HRA groups were healthier. Average annual spending
per enrollee for the public employer‘s HRA group was $1,505 lower than
the PPO group for the 2-year period prior to switching. (Spending for
the public employer was based on analysis of both medical and pharmacy
claims.) Likewise, the private employer‘s HRA group spent $566 less
per enrollee for the 2-year period prior to switching than the PPO
group (we were not able to examine pharmacy claims for the private
employer). Similarly, of the 21 studies GAO reviewed that assessed the
health status of HRA and other CDHP enrollees, 18 found they were
healthier than traditional plan enrollees based on utilization of
health care services, self-reported health status, or the prevalence
of certain diseases or disease indicators. Other demographic
differences may also explain spending and utilization differences
including that policyholders in the HRA group were younger than those
in the PPO group.
Spending and utilization for enrollees in HRAs generally increased by
a smaller amount or decreased compared with those in traditional plans
that GAO reviewed.
* Public employer. From the 2-year period before switching”2001 to
2002”to the 5-year period after switching”2003 to 2007”average annual
spending for the HRA group increased by $478 per enrollee compared
with $879 for the PPO group. This smaller increase for the HRA group
was partially driven by decreases in spending for prescription drugs.
Additionally, average annual utilization of services per enrollee
increased by a smaller amount or decreased for the HRA group compared
with the PPO group for six out of eight services GAO reviewed.
* Private employer. From the 2-year period before switching”2001 to
2002”to the 3-year period after switching”2003 to 2005”average annual
spending for the HRA group increased by $152 per enrollee compared
with $206 for the PPO group. This smaller increase for the HRA group
was partially driven by smaller increases in spending for physician
office visits and decreases in spending for emergency room services.
Additionally, average annual utilization of services per enrollee
increased by a smaller amount or decreased for the HRA group compared
with the PPO group for four out of seven services GAO reviewed.
Similarly, GAO‘s review of published studies found that seven out of
eight students that examined spending and controlled for differences
in health status or other characteristics reported lower spending
among HRAs and other CDHP enrollees relative to traditional plans.
OPM did not provide comments on the draft report. Representatives of
the two employers whose health plans GAO reviewed did not comment on
the draft report.
View [hyperlink, http://www.gao.gov/products/GAO-10-616] or key
components. For more information, contact John Dicken at (202) 512-
7114 or dickenj@gao.gov.
[End of section]
Contents:
Letter:
Background:
Data Suggest HRA Enrollees Were Healthier Than Traditional Plan
Enrollees:
Spending and Utilization for Enrollees in HRAs Generally Increased by
a Smaller Amount or Decreased Compared with Those in Traditional Plans:
Agency and External Comments:
Appendix I: Scope and Methodology:
Appendix II: Review of Published Studies:
Appendix III: Financial Features of the HRA and PPO Plans Offered at
the Public and Private Employers:
Appendix IV: Utilization of Services for Enrollees in HRAs and
Traditional Plans:
Appendix V: Demographics of Enrollees in HRAs and Traditional Plans:
Appendix VI: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Key Features of HRAs:
Table 2: Average Annual Spending per Enrollee by Service Type for the
Period before Introduction of an HRA, 2001-2002:
Table 3: Average Annual Spending per Enrollee by Service Type at the
Public Employer before and after Introduction of an HRA:
Table 4: Average Annual Spending per Enrollee by Service Type at the
Private Employer before and after Introduction of an HRA:
Table 5: Published Studies of HRA and other CDHP Enrollees and
Traditional Plan Enrollees, January 2003-March 2009:
Table 6: Financial Features of the HRA and PPO Plans Offered at the
Public and Private Employers for In-Network Services, 2003:
Table 7: Average Annual Utilization of Services per Enrollee at the
Public Employer before and after Introduction of an HRA:
Table 8: Average Annual Utilization of Services per Enrollee at the
Private Employer before and after Introduction of an HRA:
Table 9: Number of Published Studies That Reported on Utilization by
Service Type, 2003-2009:
Table 10: Average Age of Policyholders in the HRA and PPO Groups, 2003:
Table 11: Percentage of Male Policyholders in the HRA and PPO Groups,
2003:
Table 12: Percentage of Policyholders with Single Coverage in the HRA
and PPO Groups, 2003:
Figures:
Figure 1: Graphic Model of the Employer HRA and PPO Groups:
Figure 2: Hypothetical Benefit Design of an HRA:
Figure 3: Average Annual Spending per Enrollee for the Period before
Introduction of an HRA, 2001-2002:
Figure 4: Average Annual Spending per Enrollee at the Public Employer
before and after Introduction of an HRA:
Figure 5: Average Annual Spending per Enrollee for the HRA and PPO
Groups at the Public Employer, 2001-2007:
Figure 6: Average Annual Spending per Enrollee at the Private Employer
before and after Introduction of an HRA:
Figure 7: Average Annual Spending per Enrollee for the HRA and PPO
Groups at the Private Employer, 2001-2005:
Abbreviations:
CDHP: consumer-directed health plan:
FEHBP: Federal Employees Health Benefits Program:
HRA: health reimbursement arrangement:
HSA: health savings account:
IRS: Internal Revenue Service:
OPM: Office of Personnel Management:
PPO: preferred provider organization:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
July 16, 2010:
The Honorable Henry A. Waxman:
Chairman:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Pete Stark:
Chairman:
Subcommittee on Health:
Committee on Ways and Means:
House of Representatives:
More employers--including the federal government--are offering
consumer-directed health plans (CDHP) in an effort to restrain health
care cost growth. CDHPs combine a high-deductible health plan with a
tax-advantaged account that enrollees can use to pay for health care
expenses.[Footnote 1] One type of CDHP is based on a health
reimbursement arrangement (HRA), a tax-advantaged account that
reimburses enrollees for health care expenses.[Footnote 2],[Footnote
3] HRA-based plans typically have higher deductibles and lower
premiums than do traditional health insurance plans--such as preferred
provider organization (PPO) plans--and unused account balances may
carry over from year to year.[Footnote 4],[Footnote 5] HRAs are owned
by the employer, and only the employer may make contributions to them.
HRAs are typically not portable and may not be taken by the enrollees
if they leave their employer. Employers began offering CDHPs based on
HRAs in 2001.
Debate surrounding CDHPs has grown as more employers offer them to
their employees. Proponents contend that the plans can help restrain
health care spending, arguing that the high deductibles and ability to
carry over balances give enrollees an incentive to seek lower-cost
health care services and to obtain services only when necessary.
Critics are concerned that these plans may attract healthier enrollees
who use fewer health care services or may discourage enrollees from
obtaining necessary care.
Many employers, including the federal government, now have several
years' experience offering CDHPs, particularly the HRAs that were
introduced first.[Footnote 6] Given this experience and the potential
role of CDHPs as health care reforms are implemented,[Footnote 7]
there is interest in the health status of those selecting HRAs and how
these plans affect enrollees' health care spending and utilization
compared with traditional plans. For enrollees who switched into an
HRA compared with enrollees who stayed in a traditional plan, we
assessed (1) differences in health status and (2) changes in spending
and utilization of health care services. To do this, we conducted an
analysis of an HRA and a traditional health plan for two large
employers and supplemented our work with the results of several
published studies.
* Two large employers. We obtained HRA and PPO plan enrollment and
claims data for plan years 2001 through 2007 for a large public
employer and for plan years 2001 through 2005 for a large private
employer.[Footnote 8] Both employers introduced an HRA as a health
insurance option for employees at the beginning of the 2003 plan year.
[Footnote 9] For each employer, we defined a group of HRA enrollees
and a group of PPO enrollees by analyzing enrollment data.[Footnote
10] The HRA group included policyholders who were continuously
enrolled in the PPO in the 2001 and 2002 plan years, switched into the
HRA in the 2003 plan year, and stayed in the HRA for the remainder of
our study periods. The PPO group included policyholders who were
continuously enrolled in the PPO from the 2001 plan year through the
remainder of our study periods.[Footnote 11] Additionally, all groups
included the covered dependents of policyholders. (See figure 1.)
Figure 1: Graphic Model of the Employer HRA and PPO Groups:
[Refer to PDF for image: illustration]
The HRA group:
For the purposes of this report, these policyholders and their
dependents are termed the HRA group.
2001:
Policyholders originally enrolled in the PPO.
2003:
Introduction of HRA.
End of study period:
Policyholders who switched and remained in the HRA.
The PPO group:
For the purposes of this report, these policyholders and their
dependents are termed the PPO group.
2001:
Policyholders originally enrolled in the PPO.
2003:
Introduction of HRA.
End of study period:
Policyholders who remained continuously in the PPO.
Source: GAO.
[End of figure]
* Published studies. We conducted a comprehensive review of studies
published from January 2003 through March 2009 that included an
assessment of the health status, spending, utilization, or other
demographic characteristics of HRA and other CDHP enrollees compared
with those in traditional plans. We identified 31 such studies, of
which 18 focused exclusively on HRA enrollees, and 13 focused on both
HRA and other CDHP enrollees.[Footnote 12] Our review comprised peer-
reviewed journal articles, studies by insurance carriers or
independent consultants, national surveys, and government
publications. For our review of health status, we included studies
that used self-reported health status, assessed the health status or
illness burden of plan enrollees based on diagnoses or disease
indicators, or examined utilization prior to enrolling in an HRA or
other CDHP. For our review of spending and utilization, we included
only those studies that addressed selection bias as part of the
methodology to account for differences between HRA and other CDHP
enrollees and traditional plan enrollees that may affect the use of
health care services.
To assess differences in the health status of enrollees who switched
into an HRA compared with those who stayed in a traditional plan, we
analyzed HRA and PPO plan claims data for the two large employers we
examined.[Footnote 13] We compared spending and utilization for health
care services between the HRA and PPO groups for each employer before
introduction of the HRA in 2003. This design enabled us to observe the
potential effect of selection bias due to differences in health status
or other characteristics which we did not separately control for
between the two groups. We also summarized the findings of studies
that compared health status and other demographic characteristics of
HRA and other CDHP enrollees with those in traditional plans.
To assess changes in spending and utilization of health care services
for enrollees who switched into an HRA compared with those who stayed
in a traditional plan, we analyzed the changes in spending and
utilization for the HRA and PPO groups from the period before to the
period after introduction of the HRA in plan year 2003. We also
summarized the findings of studies that compared spending and
utilization of HRA and other CDHP enrollees with those in traditional
plans.
The results of our analyses are not generalizable beyond the
enrollees, health plans, and employers included in our review. The
results of our employer analyses cannot be compared between the public
and private employers. In particular, the results of our spending and
utilization analyses from the two employers may be influenced by the
benefit design--such as the financial features--of the health plans we
reviewed and the sizes of the HRA and PPO groups in our study.
Additionally, because our analyses of the two employers reflected
instances where employees had a choice between an HRA and a PPO plan
option, they do not represent the experiences of employees who have
HRAs as their only plan option. We reviewed all data for soundness and
consistency and determined that they were sufficiently reliable for
our purposes. We conducted this performance audit predominantly in two
phases from July 2007 through October 2008 and from September 2009
through July 2010 in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives. Appendix I provides more detail on our methodology and the
limitations of the data we report, and appendix II describes the
published studies that we reviewed. Appendix III provides more
information on the financial features of each of the two employers'
HRA and PPO plans that we reviewed.
Background:
In the past several years, employers and insurance carriers have begun
to offer HRAs and other CDHPs, which are intended to reduce health
care spending.[Footnote 14] To achieve this goal, CDHPs combine a high-
deductible health plan with a tax-advantaged account to pay for health
care expenses.[Footnote 15] CDHP insurance carriers may also offer
online tools to help enrollees evaluate the cost and quality of health
care services and providers. The two most common types of CDHPs
offered are those based on an HRA beginning in 2001 and those that are
eligible to be coupled with a health savings account (HSA), which were
offered beginning in 2004.
Several studies and surveys have attempted to quantify the individuals
enrolled in CDHPs and the employers that offer them. For example, one
study using national survey data estimates that about 5.5 million
employees were enrolled in CDHPs of which 2.2 million were enrolled in
HRAs and 3.2 million were enrolled in HSA-eligible plans as of 2008.
[Footnote 16] Furthermore, based on data from the Office of Personnel
Management (OPM)--the agency that administers the Federal Employees
Health Benefits Program (FEHBP)--about 57,000 of the nearly 8 million
enrollees in the FEHBP were enrolled in CDHPs in 2009. About 42,000 of
these FEHBP enrollees were in HRAs and about 15,000 were in HSA-
eligible plans. Another study using national survey data found that
HRAs were offered by 8 percent and HSA-eligible plans were offered by
14 percent of employers with 500 or more employees in 2008.[Footnote
17] CDHPs are offered by employers as one of a number of plan options,
such as PPOs, health maintenance organizations, or other traditional
plans.[Footnote 18]
Enrollees in HRAs pay premiums to access covered services. Coverage of
most services is subject to the deductible while other services, such
as preventive care services, may be exempted from the
deductible.[Footnote 19] Enrollees use their HRA account to pay for
qualified medical expenses. While account balances may accrue from
year to year, the accounts are typically not portable--that is,
employees do not own the accounts and cannot keep unspent funds if
they change jobs.[Footnote 20] HRA accounts are administered by the
employer or an insurance carrier and only employers may contribute to
the accounts. Table 1 describes the key features of HRAs.
Table 1: Key Features of HRAs:
Health plan features: Deductible;
Most employers pair HRA accounts with high-deductible plans.
Health plan features: Out-of-pocket spending limit[A];
IRS does not specify a maximum out-of-pocket spending limit.
HRA account features:
HRA account features: Use;
Reimbursement of qualified medical expenses intended to prevent or
alleviate a mental or physical condition (including vision and dental
services), and may include certain costs for insurance premiums, long-
term care insurance, and transportation to obtain medical care[B].
HRA account features: Ownership;
Employers.
HRA account features: Portability;
Typically, employees cannot retain the HRA account when they leave
their employer.
HRA account features: Who may contribute;
Employers.
HRA account features: Annual contribution amount;
Employers typically determine contribution amounts.
HRA account features: Unspent funds;
May roll over from year to year; some employers limit the maximum
balance.
HRA account features: Tax treatment;
Withdrawals for qualified medical expenses are exempt from federal
income taxes; employer contributions are excluded from gross income by
employers and are not treated as taxable income to employees.
HRA account features: Nonmedical withdrawals;
All withdrawals must be for documented medical expenses.
Source: GAO analysis of IRS guidance.
[A] Premiums and services not covered by the insurance plan do not
count toward the out-of-pocket spending limit.
[B] Qualified medical expenses are identified under the Internal
Revenue Code (See 26 U.S.C. §§ 213(d), 223(d)(2)(A)).
[End of table]
HRA enrollees must keep track of funds in their accounts. If the funds
are exhausted before the deductible is met in a given year, enrollees
are responsible for paying for the difference out of pocket. After an
enrollee meets the deductible, the plan operates much like a
traditional PPO plan. That is, the plan generally pays for most of the
cost of covered services and the enrollee contributes a cost-sharing
amount--which varies by plan--until meeting the maximum out-of-pocket
spending limit, at which point the plan pays 100 percent of the cost
of covered services[Footnote 21]. Any unspent funds in an HRA account
may be rolled over to the next year, thereby reducing or eliminating
the enrollee's share of the deductible in subsequent years.[Footnote
22] See figure 2 for a hypothetical HRA benefit design.
Figure 2: Hypothetical Benefit Design of an HRA:
[Refer to PDF for image: illustration]
Plan deductible of $1,500 for year 1:
Year 1 HRA account: $1,000 annual employer contribution;
* Health care expenses are first paid through the HRA account;
* Unspent employer contributions in the HRA account can be rolled over
to the next year.
Example: Employer contributes $1,000 to the HRA account. Enrollee
incurs $600 in health care expenses, leaving $400 in the HRA account
that can be rolled over to Year 2.
Year 1 enrollee share: up to $500;
* Difference between the HRA account balance and the deductible, if
any.
Example: Enrollee share is $0 since all health care expenses were
covered by the HRA account balance.
Traditional coverage:
Once the deductible has been met, the HRA operates much like a
traditional health plan and the enrollee pays coinsurance until the
out-of-pocket spending limit is reached.
Example: Traditional coverage does not apply since all health care
expenses were covered by the HRA account balance.
Plan deductible of $1,500 for year 2:
Year 2 HRA account: $1,000 annual employer contribution plus any
unspent employer contributions from year 1.
Example: Employer again contributes $1,000 to the HRA account,
bringing the total balance to $1,400. Enrollee incurs expenses of
$2,000.
Year 2 enrollee share: up to $500;
* Difference between the HRA account balance and the deductible, if
any.
Example: Enrollee‘s share is $100 ($1,500 plan deductible minus $1,400
HRA account balance).
Traditional coverage:
Once the deductible has been met, the HRA operates much like a
traditional health plan and the enrollee pays coinsurance until the
out-of-pocket spending limit is reached.
Example: The remaining $500 in expenses is paid under traditional
coverage terms.
Source: GAO.
[End of figure]
Data Suggest HRA Enrollees Were Healthier Than Traditional Plan
Enrollees:
On average, enrollees in the HRA groups of both employers we reviewed
spent less and generally used fewer health care services before they
switched into the HRA in 2003 than those who remained in the PPO,
suggesting that they were healthier. Average annual spending per
enrollee for the public employer's HRA group was $1,505 lower than the
PPO group for the 2-year period prior to switching in 2003. Similarly,
the private employer's HRA group spent $566 less per enrollee for the
2-year period prior to switching than the PPO group. (See figure 3.)
Figure 3: Average Annual Spending per Enrollee for the Period before
Introduction of an HRA, 2001-2002:
[Refer to PDF for image: vertical bar graph]
Average Annual Spending:
Public employer:
HRA group: $823;
PPO group: $2,328;
Difference: $1,505.
Private employer:
HRA group: $623;
PPO group: $1,188;
Difference: $566.
Source: GAO analysis of health insurance claims data.
Notes: Analysis was based on medical and pharmacy claims for the
public employer, but only medical claims for the private employer.
Annual spending was adjusted to 2007 dollars. Plan years were from
January 1 through December 31 for the public employer and from July 1
through June 30 for the private employer. Enrollees 65 years and older
were not included in our analysis. All calculations may not reflect
reported values due to rounding.
[End of figure]
We also found that for each service type we reviewed, the HRA groups
for both employers spent less per enrollee than the PPO groups over
the 2-year period prior to the switch. Most notably, we found that the
public employer's HRA group spent $399 less than the PPO group on
prescription drugs and inpatient hospital services, and $289 less on
physician office services. The private employer's HRA group spent $346
less for inpatient hospital services and $110 less for outpatient
services than the PPO group.[Footnote 23] (See table 2.)
Table 2: Average Annual Spending per Enrollee by Service Type for the
Period before Introduction of an HRA, 2001-2002:
Service type: Inpatient hospital;
Public employer: HRA group (n=968-989): $71;
Public employer: PPO group (n=1.54-1.62 million): $470;
Private employer: HRA group (n= 572-573): $73;
Private employer: PPO group (n=1,079-1,086): $419.
Service type: Outpatient;
Public employer: HRA group (n=968-989): $147;
Public employer: PPO group (n=1.54-1.62 million): $402;
Private employer: HRA group (n= 572-573): $188;
Private employer: PPO group (n=1,079-1,086): $298.
Service type: Physician office;
Public employer: HRA group (n=968-989): $319;
Public employer: PPO group (n=1.54-1.62 million): $608;
Private employer: HRA group (n= 572-573): $303;
Private employer: PPO group (n=1,079-1,086): $380.
Service type: Emergency room;
Public employer: HRA group (n=968-989): $8;
Public employer: PPO group (n=1.54-1.62 million): $12;
Private employer: HRA group (n= 572-573): $55;
Private employer: PPO group (n=1,079-1,086): $81.
Service type: Prescription drugs[A];
Public employer: HRA group (n=968-989): $211;
Public employer: PPO group (n=1.54-1.62 million): $610;
Private employer: HRA group (n= 572-573): [Empty];
Private employer: PPO group (n=1,079-1,086): [Empty].
Service type: Other;
Public employer: HRA group (n=968-989): $66;
Public employer: PPO group (n=1.54-1.62 million): $225;
Private employer: HRA group (n= 572-573): $3;
Private employer: PPO group (n=1,079-1,086): $10.
Service type: All services (total);
Public employer: HRA group (n=968-989): $823;
Public employer: PPO group (n=1.54-1.62 million): $2,328;
Private employer: HRA group (n= 572-573): $623;
Private employer: PPO group (n=1,079-1,086): $1,188.
Source: GAO analysis of health insurance claims data.
Notes: Analysis was based on medical and pharmacy claims for the
public employer, but only medical claims for the private employer.
Annual spending was adjusted to 2007 dollars. Plan years were from
January 1 through December 31 for the public employer and from July 1
through June 30 for the private employer. Enrollees 65 years and older
were not included in our analysis. All columns may not sum to the
reported total due to rounding.
[A] We were not able to examine pharmacy claims data for the private
employer.
[End of table]
In addition, we found that utilization of services was also generally
lower for the HRA groups over the 2-year period before switching into
the HRA compared with the PPO groups. For example, at the public
employer, the average annual number of physician office visits for the
HRA group was about four visits per enrollee compared with about seven
visits for the PPO group. Additionally, the HRA group filled an
average of about 4 prescriptions per enrollee per year compared with
an average of about 10 prescriptions for the PPO group. Similarly, at
the private employer, the average annual number of physician office
visits for the HRA group was about three visits per enrollee for the
HRA group compared with about four visits for the PPO group. In
addition, the average length of a hospital stay for the private
employer's HRA group was about 2 days compared with about 4 days for
the PPO group. Overall, the average percentage of enrollees who did
not receive any medical services was higher for both employers' HRA
groups relative to the PPO groups--about 21 percent versus about 17
percent, respectively, for the public employer, and about 31 percent
versus about 26 percent, respectively, for the private employer. (See
appendix IV for more information on utilization by service type.)
Our review of published studies generally found that HRA and other
CDHP enrollees tend to be healthier than those enrolled in traditional
plans. Specifically, of the 21 studies that assessed health status of
HRA and other CDHP enrollees, 18 found that they were healthier than
traditional plan enrollees based on utilization of health care
services, self-reported health status, or the prevalence of certain
diseases or disease indicators. For example, one study found that HRA
and other CDHP enrollees appeared to be nearly 14 percent healthier
than those enrolled in a traditional plan based on certain clinical
categories.[Footnote 24] In another study conducted by the Kaiser
Family Foundation, 64 percent of HRA and other CDHP enrollees reported
being in very good or excellent health, compared with 52 percent of
those enrolled in traditional plans, and were less likely to have
certain chronic conditions--23 percent versus 35 percent,
respectively.[Footnote 25] We reported in 2005 that a larger share of
non-elderly enrollees in an HRA offered by the FEHBP reported being in
"excellent" or "very good" health compared with enrollees in other
traditional plans--73 percent versus 64 and 58 percent, respectively.
[Footnote 26]
In addition to health status, other demographic differences between
the HRA and PPO groups may also explain differences in spending and
utilization prior to introduction of the HRA. For example, our
analyses of data from the two employers showed that policyholders who
switched into the HRA were about 3 years younger, and slightly more
likely to be male and elect single coverage in 2003 than those who
remained in the PPO plan. (See appendix V for additional information
on the demographics of HRA and traditional plan enrollees.)
Spending and Utilization for Enrollees in HRAs Generally Increased by
a Smaller Amount or Decreased Compared with Those in Traditional Plans:
For the public and private employers we reviewed, health care spending
and utilization of health care services for the HRA groups generally
increased by a smaller amount or decreased compared with the PPO
groups, from the period before to the period after switching.
Additionally, the majority of the studies we reviewed that examined
total or medical spending and controlled for differences in health
status or other characteristics of enrollees reported lower spending
among enrollees in HRAs and other CDHPs relative to traditional plans.
Public Employer:
At the public employer, average annual spending for the HRA group
increased by a smaller amount from the 2-year period before switching
to the 5-year period after switching compared with the PPO group.
Specifically, average annual spending for the HRA group increased by
$478 per enrollee compared with $879 for the PPO group. (See figure 4.)
Figure 4: Average Annual Spending per Enrollee at the Public Employer
before and after Introduction of an HRA:
[Refer to PDF for image: vertical bar graph]
Average Annual Spending:
HRA group:
Year: 2001-2002: $823;
Year: 2003-2007: $1,301;
Difference: $478.
PPO group:
Year: 2001-2002: $2,328;
Year: 2003-2007: $3,206;
Difference: $879.
Source: GAO analysis of health insurance claims data.
Notes: Analysis was based on medical and pharmacy claims for the
public employer. The plan year was from January 1 through December 31.
Annual spending was adjusted to 2007 dollars. Enrollees 65 years and
older were not included in our analysis. All calculations may not
reflect reported values due to rounding.
[End of figure]
Although the average annual spending for the HRA group remained
consistently lower than the PPO group after introduction of the HRA,
the average annual percentage increase in spending from 2003 through
2007 was higher for the HRA group--10 percent versus 7 percent,
respectively.[Footnote 27] This higher average annual percentage
increase for the HRA group was likely influenced by the lower base of
spending compared with the PPO group. (See figure 5.)
Figure 5: Average Annual Spending per Enrollee for the HRA and PPO
Groups at the Public Employer, 2001-2007:
[Refer to PDF for image: multiple line graph]
Year: 2001;
HRA group: $814;
PPO group: $2,104.
Year: 2002;
HRA group: $831;
PPO group: $2,564.
Year: 2003 (Introduction of HRA);
HRA group: $1,012;
PPO group: $2,802.
Year: 2004;
HRA group: $1,301;
PPO group: $3,043.
Year: 2005;
HRA group: $1,334;
PPO group: $3,243.
Year: 2006;
HRA group: $1,368;
PPO group: $3,383.
Year: 2007;
HRA group: $1,503;
PPO group: $3,649.
HRA: 10% average annual percentage increase since 2003;
PPO: 7% average annual percentage increase since 2003.
Source: GAO analysis of health insurance claims data.
Notes: Analysis was based on medical and pharmacy claims for the
public employer. The plan year was from January 1 through December 31.
Annual spending was adjusted to 2007 dollars. Enrollees 65 years and
older were not included in our analysis.
[End of figure]
At the specific service level, the public employers' HRA group
experienced greater increases in spending for inpatient hospital,
outpatient, physician office, and emergency room services than the PPO
group, but these increases were offset by decreases in spending for
prescription drugs and other services from the 2-year period before
switching to the 5-year period after switching.[Footnote 28] For
example, average annual spending for physician office services for the
HRA group increased by $159 per enrollee compared with an increase of
$120 per enrollee for the PPO group. However, average annual spending
for prescription drugs for the HRA group decreased by $47 per enrollee
compared with an increase of $263 per enrollee for the PPO group. (See
table 3.)
Table 3: Average Annual Spending per Enrollee by Service Type at the
Public Employer before and after Introduction of an HRA:
Service type: Inpatient hospital;
HRA group (n=967-1,013): 2001-2002: $71;
HRA group (n=967-1,013): 2003-2007: $248;
HRA group (n=967-1,013): Change: $176;
PPO group (n=1.25-1.62 million): 2001-2002: $470;
PPO group (n=1.25-1.62 million): 2003-2007: $630;
PPO group (n=1.25-1.62 million): Change: $160.
Service type: Outpatient;
HRA group (n=967-1,013): 2001-2002: $147;
HRA group (n=967-1,013): 2003-2007: $377;
HRA group (n=967-1,013): Change: $230;
PPO group (n=1.25-1.62 million): 2001-2002: $402;
PPO group (n=1.25-1.62 million): 2003-2007: $610;
PPO group (n=1.25-1.62 million): Change: $207.
Service type: Physician office;
HRA group (n=967-1,013): 2001-2002: $319;
HRA group (n=967-1,013): 2003-2007: $478;
HRA group (n=967-1,013): Change: $159;
PPO group (n=1.25-1.62 million): 2001-2002: $608;
PPO group (n=1.25-1.62 million): 2003-2007: $728;
PPO group (n=1.25-1.62 million): Change: $120.
Service type: Emergency room;
HRA group (n=967-1,013): 2001-2002: $8;
HRA group (n=967-1,013): 2003-2007: $20;
HRA group (n=967-1,013): Change: $12;
PPO group (n=1.25-1.62 million): 2001-2002: $12;
PPO group (n=1.25-1.62 million): 2003-2007: $21;
PPO group (n=1.25-1.62 million): Change: $8.
Service type: Prescription drugs;
HRA group (n=967-1,013): 2001-2002: $211;
HRA group (n=967-1,013): 2003-2007: $164;
HRA group (n=967-1,013): Change: -$47;
PPO group (n=1.25-1.62 million): 2001-2002: $610;
PPO group (n=1.25-1.62 million): 2003-2007: $873;
PPO group (n=1.25-1.62 million): Change: $263.
Service type: Other;
HRA group (n=967-1,013): 2001-2002: $66;
HRA group (n=967-1,013): 2003-2007: $15;
HRA group (n=967-1,013): Change: -$51;
PPO group (n=1.25-1.62 million): 2001-2002: $225;
PPO group (n=1.25-1.62 million): 2003-2007: $346;
PPO group (n=1.25-1.62 million): Change: $120.
Service type: All services (total);
HRA group (n=967-1,013): 2001-2002: $823;
HRA group (n=967-1,013): 2003-2007: $1,301;
HRA group (n=967-1,013): Change: $478;
PPO group (n=1.25-1.62 million): 2001-2002: $2,328;
PPO group (n=1.25-1.62 million): 2003-2007: $3,206;
PPO group (n=1.25-1.62 million): Change: $879.
Source: GAO analysis of health insurance claims data.
Notes: Analysis was based on medical and pharmacy claims for the
public employer. The plan year was from January 1 through December 31.
Annual spending was adjusted to 2007 dollars. Enrollees 65 years and
older were not included in our analysis. All calculations may not
reflect reported values due to rounding.
[End of table]
In addition, we found that when compared with the PPO group, the
average annual utilization of services per enrollee for the HRA group
either increased by a smaller amount or decreased from the 2-year
period before switching to the 5-year period after switching for six
out of eight service types we reviewed. For example, the average
annual number of prescriptions filled decreased by less than one
prescription per enrollee for the HRA group compared with an increase
of about four prescriptions per enrollee for the PPO group. However,
the average annual number of preventive services increased by about
one per enrollee for the HRA group compared with less than one for the
PPO group. (See appendix IV for more information on utilization by
service type.)
Private Employer:
For the HRA group, similar to the public employer, average annual
spending at the private employer increased by a smaller amount than
for the PPO group from the 2-year period before to the 3-year period
after switching. Specifically, average annual spending for the private
employer's HRA group increased by $152 per enrollee compared with $206
for the PPO group (we were not able to analyze pharmacy claims for
this employer). (See figure 6.)
Figure 6: Average Annual Spending per Enrollee at the Private Employer
before and after Introduction of an HRA:
[Refer to PDF for image: vertical bar graph]
Average Annual Spending:
HRA group:
Year: 2001-2002: $623;
Year: 2003-2007: $775;
Difference: $152.
PPO group:
Year: 2001-2002: $1,188;
Year: 2003-2007: $1,395;
Difference: $206.
Source: GAO analysis of health insurance claims data.
Notes: Analysis was based on medical claims; we were not able to
analyze pharmacy claims for the private employer. Annual spending was
adjusted to 2007 dollars. The plan year was from July 1 through June
30. Enrollees 65 years and older were not included in our analysis.
All calculations may not reflect reported values due to rounding.
[End of figure]
Moreover, average annual spending for the HRA group remained
consistently lower than for the PPO group after introduction of the
HRA, although spending fluctuated for both groups. The average annual
rate of spending for the HRA group decreased by 2 percent from 2003
through 2005, while the average annual rate of spending for the PPO
group remained about the same.[Footnote 29] (See figure 7.)
Figure 7: Average Annual Spending per Enrollee for the HRA and PPO
Groups at the Private Employer, 2001-2005:
[Refer to PDF for image: multiple line graph]
Year: 2001;
HRA group: $569;
PPO group: $927.
Year: 2002;
HRA group: $676;
PPO group: $1,451.
Year: 2003 (Introduction of HRA);
HRA group: $717;
PPO group: $1,450.
Year: 2004;
HRA group: $914;
PPO group: $1,285.
Year: 2005;
HRA group: $691;
PPO group: $1,449.
HRA: 2% average annual percentage decrease since 2003;
PPO: 0% average annual percentage change since 2003.
Source: GAO analysis of health insurance claims data.
Notes: Analysis was based on medical claims; we were not able to
analyze pharmacy claims for the private employer. Annual spending was
adjusted to 2007 dollars. The plan year was from July 1 through June
30. Enrollees 65 years and older were not included in our analysis.
[End of figure]
At the specific service level, the private employer's HRA group
experienced greater increases in spending for inpatient hospital
services compared with the PPO group, but this increase was offset by
a decrease in spending for emergency room services as well as lower
increases in spending for outpatient, physician office, and other
services from the 2-year period before switching to the 3-year period
after switching.[Footnote 30] For example, average annual spending for
inpatient hospital services for the HRA group increased by $82 per
enrollee compared with an increase of $23 per enrollee for the PPO
group. However, the average annual spending for emergency room
services for the HRA group decreased by $28 per enrollee compared with
an increase of $20 per enrollee for the PPO group. Additionally, the
average annual spending for physician office services for the HRA
group increased by only $22 per enrollee compared with an increase of
$73 per enrollee for the PPO group. (See table 4.)
Table 4: Average Annual Spending per Enrollee by Service Type at the
Private Employer before and after Introduction of an HRA:
Service type: Inpatient hospital;
HRA group (n=570-584): 2001-2002: $73;
HRA group (n=570-584): 2003-2005: $155;
HRA group (n=570-584): Change: $82;
PPO group (n=1,079-1,098): 2001-2002: $419;
PPO group (n=1,079-1,098): 2003-2005: $442;
PPO group (n=1,079-1,098): Change: $23.
Service type: Outpatient;
HRA group (n=570-584): 2001-2002: $188;
HRA group (n=570-584): 2003-2005: $264;
HRA group (n=570-584): Change: $76;
PPO group (n=1,079-1,098): 2001-2002: $298;
PPO group (n=1,079-1,098): 2003-2005: $380;
PPO group (n=1,079-1,098): Change: $82.
Service type: Physician office;
HRA group (n=570-584): 2001-2002: $303;
HRA group (n=570-584): 2003-2005: $326;
HRA group (n=570-584): Change: $22;
PPO group (n=1,079-1,098): 2001-2002: $380;
PPO group (n=1,079-1,098): 2003-2005: $453;
PPO group (n=1,079-1,098): Change: $73.
Service type: Emergency room;
HRA group (n=570-584): 2001-2002: $55;
HRA group (n=570-584): 2003-2005: $27;
HRA group (n=570-584): Change: -$28;
PPO group (n=1,079-1,098): 2001-2002: $81;
PPO group (n=1,079-1,098): 2003-2005: $101;
PPO group (n=1,079-1,098): Change: $20.
Service type: Prescription drugs[A];
HRA group (n=570-584): 2001-2002:
-;
HRA group (n=570-584): 2003-2005: [Empty];
HRA group (n=570-584): Change: [Empty];
PPO group (n=1,079-1,098): 2001-2002: [Empty];
PPO group (n=1,079-1,098): 2003-2005: [Empty];
PPO group (n=1,079-1,098): Change: [Empty].
Service type: Other;
HRA group (n=570-584): 2001-2002: $3;
HRA group (n=570-584): 2003-2005: $4;
HRA group (n=570-584): Change: $0;
PPO group (n=1,079-1,098): 2001-2002: $10;
PPO group (n=1,079-1,098): 2003-2005: $19;
PPO group (n=1,079-1,098): Change: $9.
Service type: All services (total);
HRA group (n=570-584): 2001-2002: $623;
HRA group (n=570-584): 2003-2005: $775;
HRA group (n=570-584): Change: $152;
PPO group (n=1,079-1,098): 2001-2002: $1,188;
PPO group (n=1,079-1,098): 2003-2005: $1,395;
PPO group (n=1,079-1,098): Change: $206.
Source: GAO analysis of health insurance claims data.
Notes: Analysis was based on medical claims for the private employer.
Annual spending was adjusted to 2007 dollars. The plan year was from
July 1 through June 30. Enrollees 65 years and older were not included
in our analysis. All calculations may not reflect reported values due
to rounding.
[A] We were not able to analyze pharmacy claims for the private
employer.
[End of table]
In addition, we found that when compared with the PPO group, the
average annual utilization of services per enrollee for the HRA group
either increased by a smaller amount or decreased from the 2-year
period before switching to the 3-year period after switching for four
out of seven service types we reviewed. For example, the average
annual number of preventive services increased slightly less for the
HRA group compared with the PPO group. For emergency room visits, the
average annual number of visits per enrollee slightly decreased for
the HRA group while it slightly increased for the PPO group. (See
appendix IV for more information on utilization by service type.)
Published Studies:
Consistent with our analysis of employer data, most published studies
that examined health care spending reported lower spending among
enrollees in HRAs and other CDHPs relative to traditional plans. Of
the eight studies in our review that examined total or medical
spending and controlled for differences in health status or other
characteristics of enrollees, seven found that HRAs and other CDHPs
reduced spending relative to traditional plans.[Footnote 31] For
example, the cost of medical and pharmacy care for HRA and other CDHP
enrollees was more than 4 percent lower than that of those in
traditional plans after accounting for differences in illness burden.
[Footnote 32] In addition, of the six studies that reviewed spending
for prescription drugs, four reported that HRA and other CDHP
enrollees spent less than did traditional plan enrollees.[Footnote 33]
For example, one study found that costs were 10 percent lower for HRA
and other CDHPs than for traditional plans, suggesting a higher use of
generic drugs and mail order purchasing.[Footnote 34] The one study
that did not find savings in total spending through an HRA found that
it was 23 percent more expensive than the traditional plan by its
third year of existence.[Footnote 35] However, the study authors
acknowledged that this may be due to the plan design of the HRA, which
provided 100 percent coverage after enrollees paid a small share of
the deductible.
When considering the results of the published studies that reviewed
spending, it is important to note that these studies assessed
differences over a short time period. Of the seven studies that found
reduced spending, five studies found lower rates over a 1-or 2-year
period. For example, three of the studies were published by Cigna
HealthCare and were each a 1-year update on the claims costs of their
HRAs and other CDHPs relative to their traditional plans.[Footnote 36]
The study that did not find lower spending reported that spending was
higher among HRA enrollees than among traditional plan enrollees over
a 3-year period, by as much as 26 percent in a single year.[Footnote
37]
We also reviewed published studies that reported on differences in
utilization of health care services and generally found lower
utilization among HRA and other CDHP enrollees compared with
traditional plan enrollees for two of the five service types we
reviewed. In particular, we reviewed studies that reported on
utilization of inpatient hospital admissions, outpatient visits,
emergency room visits, physician office visits, and preventive
services and whether they reported a lower, higher, or no conclusive
difference in utilization among HRA and other CDHP enrollees compared
with traditional plan enrollees. For example, three out of four
studies that assessed visits to the emergency room found a decrease in
emergency room utilization among HRA and other CDHP enrollees relative
to traditional plan enrollees. Eight studies assessed the utilization
of preventive services, and six found an increase among HRA and other
CDHP enrollees relative to traditional plan enrollees. This may be due
to the fact that most HRAs and other CDHPs exempt preventive services
from the deductible. (See appendix IV for more information on the
results of our review of published studies on utilization by service
type for HRA and other CDHP enrollees compared with those in
traditional plans.)
Agency and External Comments:
We provided a draft of the report for review and comment to OPM
because of its role administering the health insurance program for
federal employees. We provided a draft of this report to
representatives of the public and private employers whose health plans
we reviewed and to two independent health policy researchers with
experience studying CDHPs. OPM did not comment on the draft report.
One of the independent researchers commented that the study made good
use of employer data sets and existing research, the methods were
appropriate to the study objectives, and the findings were consistent
with the larger body of research in this area. The researcher also
raised several questions about the implications of our findings that
were beyond the scope of this study. The remaining parties did not
comment on the draft report.
As we agreed with your offices, unless you publicly announce the
contents of this report earlier, we plan no further distribution of it
until 30 days from the date of this report. At that time, we will send
copies of this report to the Director of OPM, appropriate
congressional committees, and other interested parties. The report
will be available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you or your staffs have questions about this report, please contact
me at (202) 512-7114 or at dickenj@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to
this report are listed in appendix VI.
Signed by:
John E. Dicken:
Director, Health Care:
[End of section]
Appendix I: Scope and Methodology:
For enrollees who switched into plans based on health reimbursement
arrangements (HRA) compared with enrollees who stayed in a traditional
plan, we assessed (1) differences in health status and (2) changes in
spending and utilization of health care services.[Footnote 38] We
conducted this performance audit predominantly in two phases from July
2007 through October 2008 and from September 2009 through July 2010 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Data and Information Sources:
To address our research objectives, we conducted an analysis of an HRA
and a traditional health plan for two large employers and supplemented
our work with the results of several published studies.
* Two large employers. We obtained HRA and preferred provider
organization (PPO) plan enrollment and claims data for plan years 2001
through 2007 for a large public employer and for plan years 2001
through 2005 for a large private employer.[Footnote 39] We
judgmentally selected these employers because each:
- offered an HRA as one of multiple plan options for at least 3 years;
- offered traditional plans, including a PPO, for 2 years before and
at least 3 years after the HRA was implemented; and:
- did not switch insurance carriers or significantly change their HRA
or PPO plan features during the study period.[Footnote 40] (See
appendix III for financial features of each employer's HRA and PPO
plans.)
Both employers introduced an HRA as a health insurance option for
employees at the beginning of the 2003 plan year.[Footnote 41] For
each employer, we defined a group of HRA enrollees and a group of PPO
enrollees by analyzing enrollment data.[Footnote 42] The HRA group
included policyholders who were continuously enrolled in the PPO in
the 2001 and 2002 plan years, switched into the HRA in the 2003 plan
year, and stayed in the HRA for the remainder of our study periods.
The PPO group included policyholders who were continuously enrolled in
the PPO from the 2001 plan year through the remainder of our study
periods.[Footnote 43] Additionally, all groups included the covered
dependents of policyholders.
For the public employer, the total number of enrollees ranged from 967
to 1,013 in the HRA group and from 1.25 million to 1.62 million in the
PPO group over the study period. For the private employer, the number
of enrollees ranged from 570 to 584 in the HRA group and from 1,079 to
1,098 in the PPO group over the study period. Group sizes fluctuated
from year to year as enrollees who turned 65 years of age were removed
from the analysis and the number of dependents changed.[Footnote 44]
* Published studies. We conducted a comprehensive review of studies
published from January 2003 through March 2009 that included an
assessment of the health status, spending, utilization, or other
demographic characteristics of HRA and other CDHP enrollees compared
with those in traditional plans. We identified 31 such studies, of
which 18 focused exclusively on HRA enrollees, and 13 focused on both
HRA and other consumer-directed health plan (CDHP) enrollees in plans
eligible to be coupled with a health savings account (HSA).[Footnote
45] Our review comprised peer-reviewed journal articles, studies by
insurance carriers or independent consultants, national surveys, and
government publications. For our review of health status, we included
studies that used self-reported health status, assessed the health
status or illness burden of plan enrollees based on diagnoses or
disease indicators, or examined utilization prior to enrolling in an
HRA. For our review of spending and utilization, we included only
those studies that addressed selection bias as part of the methodology
to account for differences between HRA and other CDHP enrollees and
traditional plan enrollees that may affect the use of health care
services. (See appendix II for our methodology and a list of studies
we included in our review of published studies.)
Health Status of HRA and Traditional Plan Enrollees:
To assess differences in the health status of enrollees who switched
into an HRA compared with those who stayed in a traditional plan, we
analyzed HRA and PPO plan claims data for the two large employers we
examined.[Footnote 46],[Footnote 47] We compared spending and
utilization of health care services between the HRA and PPO groups for
each employer before introduction of the HRA in plan year 2003.
[Footnote 48] This design enabled us to observe the potential effect
of selection bias due to differences in health status or other
characteristics which we did not separately control for between the
two groups. We also summarized the findings of studies that compared
health status and other demographic characteristics of HRA and other
CDHP enrollees with those in traditional plans.[Footnote 49]
Spending and Utilization of HRA and Traditional Plan Enrollees:
To assess changes in spending and utilization of health care services
for enrollees who switched into an HRA compared with those who stayed
in a traditional plan, we analyzed the change in spending and
utilization of health care services for the HRA and PPO groups from
the period before to the period after introduction of the HRA in plan
year 2003. We also summarized the findings of studies that compared
spending and utilization of HRA and other CDHP enrollees with those in
traditional plans.
For all of our spending analyses, we included the portion paid by the
health plan and the portion paid by the enrollee in our calculations.
[Footnote 50] We examined total spending across all medical services
and by the following service types:[Footnote 51]
* inpatient hospital,
* outpatient,
* physician office,
* emergency room, and:
* prescription drugs.[Footnote 52]
All spending results were expressed in 2007 dollars using the medical
care consumer price index to control for inflation.[Footnote 53]
Similar to our spending analyses, we examined utilization of the
service types listed above.[Footnote 54] In addition, we examined
utilization by the following service types and other measures:
* nonpreventive diagnostic radiology procedures,
* nonpreventive diagnostic pathology or laboratory procedures,
* preventive care services,
* length of stay for an inpatient hospital admission, and:
* percentage of enrollees with no medical claims.[Footnote 55]
Data Reliability and Limitations:
We reviewed all data for soundness and consistency and determined that
they were sufficiently reliable for our purposes. We discussed our
data sources with knowledgeable officials from the health plans and
employers we reviewed. For the employer data, we also performed data
reliability checks to test the internal consistency and reliability of
the data, including removing outlier claims for each year,[Footnote
56] interviewing health plan officials to understand their coding
systems, and reviewing steps the plans took to ensure their enrollment
and claims data were complete and accurate. We excluded claims that
indicated a coordination of benefits between the HRA or PPO plans and
other insurers.[Footnote 57] Because we analyzed health insurance
claims from an HRA and a PPO plan for each of the two employers we
reviewed, variations may exist across the data systems used by each
plan in how they designate claims by service type. Further,
differences may exist in the negotiated rates that each plan pays
providers for services.
The results of our analyses are not generalizable beyond the
enrollees, health plans, and employers included in our review. The
results of our employer analyses cannot be compared between the public
and private employers. In particular, the results of our spending and
utilization analyses from the two employers may be influenced by the
benefit design of the health plans we reviewed and the sizes of the
HRA and PPO groups in our study. Additionally, because our analyses of
the two employers reflected instances where employees had a choice
between an HRA and a PPO plan option, they do not represent the
experiences of employees who have HRAs as their only plan option.
[End of section]
Appendix II: Review of Published Studies:
We conducted a comprehensive review of published studies from January
2003 through March 2009 that included an assessment of the health
status, spending, utilization, or other demographic characteristics of
HRA and other CDHP enrollees compared with traditional plan enrollees.
We identified 31 such studies, of which 18 focused exclusively on HRA
enrollees, and 13 focused on both HRA and other CDHP enrollees in an
HSA-eligible plan. Our review comprised peer-reviewed journal
articles, studies by insurance carriers or independent consultants,
national surveys, and government publications.[Footnote 58]
For our review of health status, we included studies that used self-
reported health status, assessed the health status or illness burden
of plan enrollees based on diagnoses or disease indicators, or
examined utilization prior to enrolling in an HRA or other CDHP. For
our review of spending and utilization, we included only those studies
that addressed selection bias as part of the methodology to account
for differences between HRA and other CDHP enrollees and traditional
plan enrollees that may affect the use of health care services. For
example, these methodologies included:
* using a regression analysis to control for differences in
demographic characteristics between study and control groups;
* weighting the data to adjust for differences in demographic
characteristics between groups; or:
* examining the change from a traditional plan to a full replacement
HRA, whereby all of the traditional plan enrollees migrated to the HRA.
Our review of spending by HRA and other CDHP enrollees compared with
traditional plan enrollees also included only those studies that
included both the employer and the employee portion of spending for a
health care service.
For our review of other demographic characteristics, we assessed the
age, gender, type of coverage (single or family), and salary of HRA
and other CDHP enrollees compared with traditional plan enrollees.
Table 5 identifies the 31 studies included in our review, and whether
we used each study to address health status, spending, utilization, or
otherwise describe demographic characteristics of enrollees.
Table 5: Published Studies of HRA and other CDHP Enrollees and
Traditional Plan Enrollees, January 2003-March 2009:
Study: Barry, C., and others. "Who Chooses a Consumer-Directed Health
Plan?" Health Affairs, vol. 27, no. 6 (2008): 1671-1679;
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: Blue Cross Blue Shield Association. Consumer-Directed Health
Plans: Consumer Perspectives, 2008 CDHP Member Experience Report.
November 2008;
Health status: [Check];
Spending: [Empty];
Utilization: [Check]
Demographic characteristics: [Check].
Study: Briggs Fowles, J., and others. "Early Experience with Employee
Choice of Consumer-Directed Health Plans and Satisfaction with
Enrollment." Health Services Research, vol. 39, no. 4, Part II (2004):
1141-1158;
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: Christianson, J. B., and others. "Consumer Experiences in a
Consumer-Driven Health Plan." Health Services Research, vol. 39, no.
4, Part II (2004): 1123-1139;
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: Cigna Choice Fund Results Analysis, November 2006;
Health status: [Empty];
Spending: [Check];
Utilization: [Check];
Demographic characteristics: [Empty].
Study: Cigna Choice Fund Experience Study, October 2007;
Health status: [Empty];
Spending: [Check];
Utilization: [Check];
Demographic characteristics: [Empty].
Study: Cigna Choice Fund Experience Study, January 2009;
Health status: [Empty];
Spending: [Check];
Utilization: [Check];
Demographic characteristics: [Empty].
Study: Dixon, A., and others. "Do Consumer-Directed Health Plans Drive
Change in Enrollees' Health Care Behavior?" Health Affairs, vol. 27,
no. 4 (2008): 1120-1131;
Health status: [Check];
Spending: [Empty];
Utilization: [Check];
Demographic characteristics: [Check].
Study: Express Scripts. What Happens to Prescription Drug Use After
Consumer-Directed Health Plan Enrollment? April 2007;
Health status: [Check];
Spending: [Empty];
Utilization: [Check];
Demographic characteristics: [Check].
Study: Feldman, R., and others. "Consumer-Directed Health Plans: New
Evidence on Spending and Utilization." Inquiry, vol. 44, no. 1 (2007):
26-40;
Health status: [Check];
Spending: [Check];
Utilization: [Check];
Demographic characteristics: [Check].
Study: Fronstin, P., and S. Collins. "Early Experience with High-
Deductible and Consumer-Driven Health Plans: Findings From the EBRI/
Commonwealth Fund Consumerism in Health Survey." EBRI Issue Brief, no.
288 (December 2005);
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: Fronstin, P., and S. Collins. "The 2nd Annual EBRI/Commonwealth
Fund Consumerism in Health Care Survey, 2006: Early Experience with
High Deductible and Consumer-Driven Health Plans." EBRI Issue Brief,
no. 300 (December 2006);
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: Fronstin, P., and S. Collins. "Findings From the 2007 EBRI/
Commonwealth Fund Consumerism in Health Survey." EBRI Issue Brief, no.
315 (March 2008);
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: Fronstin, Paul. "Findings From the 2008 EBRI Consumer
Engagement in Health Care Survey." EBRI Issue Brief, no. 323 (November
2008);
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: GAO. Federal Employees Health Benefits Program: Early
Experience with a Consumer-Directed Health Plan. GAO-06-143.
Washington, D.C.: November 21, 2005;
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: Greene, J., and others. "The Impact of Consumer-Directed Health
Plans on Prescription Drug Use." Health Affairs, vol. 27, no. 4
(2008): 1111-1119;
Health status: [Check];
Spending: [Empty];
Utilization: [Check];
Demographic characteristics: [Check].
Study: Greene, J., and others. "Which Consumers Are Ready for Consumer-
Directed Health Plans?" Journal of Consumer Policy, vol. 29, no. 3
(2006): 247-262;
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: HealthPartners. Consumer Directed Health Plans Analysis.
October 2007;
Health status: [Check];
Spending: [Check];
Utilization: [Check];
Demographic characteristics: [Check].
Study: Hibbard, J., and others. "Does Enrollment in a CDHP Stimulate
Cost-Effective Utilization?" Medical Care Research and Review, vol.
65, no. 4 (2008): 437-449;
Health status: [Empty];
Spending: [Empty];
Utilization: [Check];
Demographic characteristics: [Check].
Study: The Henry J. Kaiser Family Foundation. National Survey of
Enrollees in Consumer Directed Health Plans. Menlo Park, Calif.,
November 2006;
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: Lo Sasso, A., and others. "Tales from the New Frontier:
Pioneers' Experiences with Consumer-Driven Health Care." Health
Services Research, vol. 39, no. 4, Part II (2004): 1071-1089;
Health status: [Empty];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: McKinsey and Company. Consumer-Directed Health Plan Report -
Early Evidence Is Promising. Pittsburgh, Pa., June 2005;
Health status: [Empty];
Spending: [Check];
Utilization: [Check];
Demographic characteristics: [Empty].
Study: Milliman, Inc. Consumer-Driven Impact Study, Seattle, Wash.,
April 2008;
Health status: [Empty];
Spending: [Check];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: Nair, K., and others. "Consumer-Driven Health Plans: Their
Impact on Medical Utilization, Pharmacy Utilization, and
Expenditures." Journal of Health Care Finance, vol. 35, no. 1 (2008):
1-12;
Health status: [Check];
Spending: [Empty];
Utilization: [Check];
Demographic characteristics: [Check].
Study: Parente, S., and others. "Effects of a Consumer Driven Health
Plan on Pharmaceutical Spending and Utilization." Health Services
Research, vol. 43, no. 5, Part I (2008): 1542-1556;
Health status: [Check];
Spending: [Check];
Utilization: [Check];
Demographic characteristics: [Check].
Study: Parente, S., and others. "Employee Choice of Consumer-Driven
Health Insurance in a Multi-Plan Multi-Product Setting." Health
Services Research, vol. 39, no. 4, Part II (2004): 1091-1111;
Health status: [Empty];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: Parente, S., and others. "Evaluation of the Effect of a
Consumer-Driven Health Plan on Medical Care Expenditures and
Utilization." Health Services Research, vol. 39, no. 4, Part II
(2004): 1189-1209;
Health status: [Check];
Spending: [Check];
Utilization: [Check];
Demographic characteristics: [Check].
Study: Rowe, J. W., and others. "The Effect of Consumer-Directed
Health Plans on the Use of Preventative and Chronic Illness Services."
Health Affairs, vol. 27, no. 1 (2008): 113-120;
Health status: [Empty];
Spending: [Empty];
Utilization: [Check];
Demographic characteristics: [Empty].
Study: Tollen, L. A., and others. "Risk Segmentation Related to the
Offering of a Consumer-Directed Health Plan: A Case Study of Humana,
Inc." Health Services Research, vol. 39, no. 4, Part II (2004): 1167-
1187;
Health status: [Check];
Spending: [Empty];
Utilization: [Empty];
Demographic characteristics: [Check].
Study: United Health Group. Definity Consumer-Driven Health (CDH)
Impact Study, July 2006;
Health status: [Empty];
Spending: [Empty];
Utilization: [Check];
Demographic characteristics: [Empty].
Study: Wilson, A., and others. "More Preventative Care, and Fewer
Emergency Room Visits and Prescription Drugs: Health Care Utilization
in a Consumer-Driven Health Plan." Benefits Quarterly, vol. 24, no. 1
(2008): 46-54;
Health status: [Check];
Spending: [Empty];
Utilization: [Check];
Demographic characteristics: [Check].
Source: GAO analysis of published studies.
[End of table]
[End of section]
Appendix III: Financial Features of the HRA and PPO Plans Offered at
the Public and Private Employers:
Table 6 below summarizes the financial features of the HRA and PPO
plans offered by the public and private employers we reviewed. The
financial features presented are for in-network services in plan year
2003--the first year HRAs were introduced by the employers.
Table 6: Financial Features of the HRA and PPO Plans Offered at the
Public and Private Employers for In-Network Services, 2003:
Feature: Annual enrollee share of premium;
Coverage type: Single;
Public employer: HRA: $946;
Public employer: PPO: $1,187;
Private employer: HRA: $312[A];
Private employer: PPO: $624[A].
Feature: Annual enrollee share of premium;
Coverage type: Family[B];
Public employer: HRA: $2,244;
Public employer: PPO: $2,736;
Private employer: HRA: $1,248[A];
Private employer: PPO: $2,172[A].
Feature: Annual enrollee deductible[C];
Coverage type: Single;
Public employer: HRA: $1,600;
Public employer: PPO: $250;
Private employer: HRA: $2,500;
Private employer: PPO: $300.
Feature: Annual enrollee deductible[C];
Coverage type: Family[B];
Public employer: HRA: $3,200;
Public employer: PPO: $500;
Private employer: HRA: $5,000;
Private employer: PPO: $600.
Feature: Annual employer HRA contribution[D];
Coverage type: Single;
Public employer: HRA: $1,000;
Public employer: PPO: N/A;
Private employer: HRA: $750[E];
Private employer: PPO: N/A.
Feature: Annual employer HRA contribution[D];
Coverage type: Family[B];
Public employer: HRA: $2,000;
Public employer: PPO: N/A;
Private employer: HRA: $1,500[E];
Private employer: PPO: N/A.
Feature: Enrollee coinsurance after deductible is met;
Coverage type: Single;
Public employer: HRA: 15%[F];
Public employer: PPO: 10%[G];
[Empty];
Private employer: HRA: 0%;
Private employer: PPO: 15%.
Feature: Enrollee coinsurance after deductible is met;
Coverage type: Family[B];
Public employer: HRA: 15%[F];
Public employer: PPO: 10%[G];
Private employer: HRA: 0%;
Private employer: PPO: 15%.
Feature: Annual enrollee out-of-pocket maximum;
Coverage type: Single;
Public employer: HRA: $4,500[H];
Public employer: PPO: $4,000[I];
[Empty];
Private employer: HRA: N/A[J];
Private employer: PPO: $2,000[K].
Feature: Annual enrollee out-of-pocket maximum;
Coverage type: Family[B];
Public employer: HRA: $4,500[H];
Public employer: PPO: $4,000[I];
Private employer: HRA: N/A[J];
Private employer: PPO: $4,000[K].
Source: GAO analysis of HRA and PPO plan brochures.
Notes: Financial features presented in this table represent the
features of the four health plans used in our analysis from plan year
2003--the first year HRAs were introduced by those employers. Except
for an increase in premiums, there were no major changes in any of the
plans' financial features for the period of our analysis between 2001
and 2007. The plan year for the public employer runs from January 1
through December 31, while the plan year for the private employer runs
from July 1 through June 30.
[A] Premiums listed for the private employer's plans are for employees
who are nonsmokers and earn less than $85,000 annually. Premiums are
higher for employees who are smokers or earn $85,000 or more annually.
[B] Family coverage includes the policyholder, spouse, and children.
[C] Under the PPOs, copayments do not count toward the deductible, and
there are no copayments under the HRAs. Under the HRAs, charges for
preventive care are not subject to the deductible.
[D] Unused funds from the employer's contribution toward the HRA
account can be rolled over from year to year. The public employer plan
limits the funds that can accrue in the HRA account to a maximum
account balance of $4,000 for single coverage or $6,000 for family
coverage while the private employer plan imposes no such limitation.
The enrollee is responsible for the portion of the annual deductible
that is not covered by the employer's contribution.
[E] Employer contributions listed in the table are for employees
earning more than $35,000 annually. The employer contributes more if
employees earn less than $35,000 annually.
[F] Twenty-five percent coinsurance is charged for covered
prescription drugs obtained through a retail pharmacy with a minimum
of $8 per prescription.
[G] Twenty-five percent coinsurance is charged for covered
prescription drugs obtained through a retail pharmacy.
[H] Out-of-pocket expenses that count towards the maximum include
coinsurance, but do not include coinsurance for outpatient
prescription drugs.
[I] Out-of-pocket expenses that count towards the maximum include
deductibles, coinsurance, and copayments.
[J] One hundred percent of all in-network services are covered after
the enrollee has met the deductible.
[K] Out-of-pocket expenses that count towards the maximum include
deductibles and coinsurance.
[End of table]
[End of section]
Appendix IV: Utilization of Services for Enrollees in HRAs and
Traditional Plans:
Tables 7 and 8 compare utilization by service type for the HRA groups
with the PPO groups before and after introduction of the HRA for the
public and private employers we reviewed. Table 9 summarizes the
findings of studies we reviewed that included an assessment of the
utilization of HRA and other CDHP enrollees compared with those in
traditional plans.
Table 7: Average Annual Utilization of Services per Enrollee at the
Public Employer before and after Introduction of an HRA:
Service type: Inpatient hospital admissions;
HRA group (n=967-1,013): 2001-2002: 0.02;
HRA group (n=967-1,013): 2003-2007: 0.03;
HRA group (n=967-1,013): Change: 0.01;
PPO group (n=1.25-1.62 million): 2001-2002: 0.09;
PPO group (n=1.25-1.62 million): 2003-2007: 0.09;
PPO group (n=1.25-1.62 million): Change: 0.00.
Service type: Outpatient visits;
HRA group (n=967-1,013): 2001-2002: 0.51;
HRA group (n=967-1,013): 2003-2007: 0.54;
HRA group (n=967-1,013): Change: 0.03;
PPO group (n=1.25-1.62 million): 2001-2002: 1.23;
PPO group (n=1.25-1.62 million): 2003-2007: 1.64;
PPO group (n=1.25-1.62 million): Change: 0.41.
Service type: Physician office visits;
HRA group (n=967-1,013): 2001-2002: 3.72;
HRA group (n=967-1,013): 2003-2007: 3.82;
HRA group (n=967-1,013): Change: 0.10;
PPO group (n=1.25-1.62 million): 2001-2002: 6.62;
PPO group (n=1.25-1.62 million): 2003-2007: 7.77;
PPO group (n=1.25-1.62 million): Change: 1.14.
Service type: Emergency room visits;
HRA group (n=967-1,013): 2001-2002: 0.05;
HRA group (n=967-1,013): 2003-2007: 0.09;
HRA group (n=967-1,013): Change: 0.04;
PPO group (n=1.25-1.62 million): 2001-2002: 0.08;
PPO group (n=1.25-1.62 million): 2003-2007: 0.15;
PPO group (n=1.25-1.62 million): Change: 0.06.
Service type: Radiology procedures;
HRA group (n=967-1,013): 2001-2002: 0.39;
HRA group (n=967-1,013): 2003-2007: 0.30;
HRA group (n=967-1,013): Change: -0.09;
PPO group (n=1.25-1.62 million): 2001-2002: 0.92;
PPO group (n=1.25-1.62 million): 2003-2007: 0.97;
PPO group (n=1.25-1.62 million): Change: 0.05.
Service type: Pathology/laboratory procedures;
HRA group (n=967-1,013): 2001-2002: 0.84;
HRA group (n=967-1,013): 2003-2007: 0.49;
HRA group (n=967-1,013): Change: -0.36;
PPO group (n=1.25-1.62 million): 2001-2002: 1.68;
PPO group (n=1.25-1.62 million): 2003-2007: 1.71;
PPO group (n=1.25-1.62 million): Change: 0.03.
Service type: Preventive services;
HRA group (n=967-1,013): 2001-2002: 1.26;
HRA group (n=967-1,013): 2003-2007: 2.30;
HRA group (n=967-1,013): Change: 1.04;
PPO group (n=1.25-1.62 million): 2001-2002: 0.70;
PPO group (n=1.25-1.62 million): 2003-2007: 0.93;
PPO group (n=1.25-1.62 million): Change: 0.22.
Service type: Prescriptions filled;
HRA group (n=967-1,013): 2001-2002: 3.80;
HRA group (n=967-1,013): 2003-2007: 3.57;
HRA group (n=967-1,013): Change: -0.23;
PPO group (n=1.25-1.62 million): 2001-2002: 10.42;
PPO group (n=1.25-1.62 million): 2003-2007: 14.90;
PPO group (n=1.25-1.62 million): Change: 4.48.
Other measures: Length of hospital stay (days);
HRA group (n=967-1,013): 2001-2002: 1.36;
HRA group (n=967-1,013): 2003-2007: 2.66;
HRA group (n=967-1,013): Change: 1.30;
PPO group (n=1.25-1.62 million): 2001-2002: 2.01;
PPO group (n=1.25-1.62 million): 2003-2007: 2.43;
PPO group (n=1.25-1.62 million): Change: 0.42.
Other measures: Percentage with no medical claims;
HRA group (n=967-1,013): 2001-2002: 21.36;
HRA group (n=967-1,013): 2003-2007: 19.37;
HRA group (n=967-1,013): Change: -1.99;
PPO group (n=1.25-1.62 million): 2001-2002: 16.71;
PPO group (n=1.25-1.62 million): 2003-2007: 19.74;
PPO group (n=1.25-1.62 million): Change: 3.03.
Source: GAO analysis of health insurance claims data.
Notes: Utilization is based on analysis of medical and pharmacy claims
for the public employer. Radiology and pathology/laboratory procedures
are for nonpreventive diagnostic procedures. The plan year was from
January 1 through December 31. Enrollees 65 years and older were not
included in our analysis. All calculations may not reflect reported
values due to rounding.
[End of table]
Table 8: Average Annual Utilization of Services per Enrollee at the
Private Employer before and after Introduction of an HRA:
Service type: Inpatient hospital admissions;
HRA group (n=570-584): 2001-2002: 0.01;
HRA group (n=570-584): 2003-2005: 0.01;
HRA group (n=570-584): Change: 0.00;
PPO group (n=1,079-1,098): 2001-2002: 0.03;
PPO group (n=1,079-1,098): 2003-2005: 0.03;
PPO group (n=1,079-1,098): Change: 0.00.
Service type: Outpatient visits;
HRA group (n=570-584): 2001-2002: 0.55;
HRA group (n=570-584): 2003-2005: 0.71;
HRA group (n=570-584): Change: 0.16;
PPO group (n=1,079-1,098): 2001-2002: 0.84;
PPO group (n=1,079-1,098): 2003-2005: 1.07;
PPO group (n=1,079-1,098): Change: 0.23.
Service type: Physician office visits;
HRA group (n=570-584): 2001-2002: 3.35;
HRA group (n=570-584): 2003-2005: 3.36;
HRA group (n=570-584): Change: 0.01;
PPO group (n=1,079-1,098): 2001-2002: 4.12;
PPO group (n=1,079-1,098): 2003-2005: 4.91;
PPO group (n=1,079-1,098): Change: 0.79.
Service type: Emergency room visits;
HRA group (n=570-584): 2001-2002: 0.19;
HRA group (n=570-584): 2003-2005: 0.12;
HRA group (n=570-584): Change: -0.08;
PPO group (n=1,079-1,098): 2001-2002: 0.27;
PPO group (n=1,079-1,098): 2003-2005: 0.30;
PPO group (n=1,079-1,098): Change: 0.03.
Service type: Radiology procedures;
HRA group (n=570-584): 2001-2002: 0.33;
HRA group (n=570-584): 2003-2005: 0.42;
HRA group (n=570-584): Change: 0.09;
PPO group (n=1,079-1,098): 2001-2002: 0.48;
PPO group (n=1,079-1,098): 2003-2005: 0.54;
PPO group (n=1,079-1,098): Change: 0.06.
Service type: Pathology/laboratory procedures;
HRA group (n=570-584): 2001-2002: 0.43;
HRA group (n=570-584): 2003-2005: 0.63;
HRA group (n=570-584): Change: 0.20;
PPO group (n=1,079-1,098): 2001-2002: 0.70;
PPO group (n=1,079-1,098): 2003-2005: 0.85;
PPO group (n=1,079-1,098): Change: 0.15.
Service type: Preventive services;
HRA group (n=570-584): 2001-2002: 0.87;
HRA group (n=570-584): 2003-2005: 1.11;
HRA group (n=570-584): Change: 0.24;
PPO group (n=1,079-1,098): 2001-2002: 1.05;
PPO group (n=1,079-1,098): 2003-2005: 1.34;
PPO group (n=1,079-1,098): Change: 0.29.
Service type: Prescriptions filled[A];
HRA group (n=570-584): 2001-2002: [Empty];
HRA group (n=570-584): 2003-2005: [Empty]
HRA group (n=570-584): Change: [Empty];
PPO group (n=1,079-1,098): 2001-2002: [Empty];
PPO group (n=1,079-1,098): 2003-2005: [Empty];
PPO group (n=1,079-1,098): Change: [Empty].
Other measures: Length of hospital stay (days);
HRA group (n=570-584): 2001-2002: 2.30;
HRA group (n=570-584): 2003-2005: 2.32;
HRA group (n=570-584): Change: 0.02;
PPO group (n=1,079-1,098): 2001-2002: 3.64;
PPO group (n=1,079-1,098): 2003-2005: 3.67;
PPO group (n=1,079-1,098): Change: 0.03.
Other measures: Percentage with no medical claims;
HRA group (n=570-584): 2001-2002: 31.35;
HRA group (n=570-584): 2003-2005: 29.20;
HRA group (n=570-584): Change: -2.16;
PPO group (n=1,079-1,098): 2001-2002: 25.73;
PPO group (n=1,079-1,098): 2003-2005: 22.20;
PPO group (n=1,079-1,098): Change: -3.53.
Source: GAO analysis of health insurance claims data.
Note: Utilization is based on an analysis of medical claims for the
private employer. Radiology and pathology/laboratory procedures are
for nonpreventive diagnostic procedures. The plan year was from July 1
through June 30. Enrollees 65 years and older were not included in our
analysis. All calculations may not reflect reported values due to
rounding.
[A] We were not able to analyze pharmacy claims for the private
employer.
[End of table]
Table 9: Number of Published Studies That Reported on Utilization by
Service Type, 2003-2009:
Service type: Inpatient hospital admissions;
Compared with traditional plan enrollees, the number of studies that
reported:
Lower utilization among HRA and other CDHP enrollees: 2;
Higher utilization among HRA and other CDHP enrollees: 2;
No difference or mixed results: 2;
Total number of studies: 6.
Service type: Outpatient visits;
Compared with traditional plan enrollees, the number of studies that
reported:
Lower utilization among HRA and other CDHP enrollees: 1;
Higher utilization among HRA and other CDHP enrollees: 0;
No difference or mixed results: 1;
Total number of studies: 2.
Service type: Emergency room visits;
Compared with traditional plan enrollees, the number of studies that
reported:
Lower utilization among HRA and other CDHP enrollees: 3;
Higher utilization among HRA and other CDHP enrollees: 0;
No difference or mixed results: 1;
Total number of studies: 4.
Service type: Physician office visits;
Compared with traditional plan enrollees, the number of studies that
reported:
Lower utilization among HRA and other CDHP enrollees: 3;
Higher utilization among HRA and other CDHP enrollees: 1;
No difference or mixed results: 1;
Total number of studies: 5.
Service type: Preventive services;
Compared with traditional plan enrollees, the number of studies that
reported:
Lower utilization among HRA and other CDHP enrollees: 0;
Higher utilization among HRA and other CDHP enrollees: 6;
No difference or mixed results: 2;
Total number of studies: 8.
Source: GAO review of published studies that included an assessment of
the utilization of HRA and other CDHP enrollees compared with those in
traditional plans, and controlled for selection bias.
[End of table]
[End of section]
Appendix V: Demographics of Enrollees in HRAs and Traditional Plans:
To understand demographic differences between HRA enrollees and
traditional plan enrollees, we relied on an analysis of enrollment
data from the two large employers we reviewed and compared our results
to other national data sources and published studies. Specifically, we
examined the age, gender, type of coverage (single or family), and
salary of policyholders in the HRA and PPO groups at the beginning of
plan year 2003 when the HRAs were first offered by each
employer.[Footnote 59] We also analyzed these demographic
characteristics using 2004 data from large insurance carriers active
in the HRA and PPO markets[Footnote 60] and summarized the findings of
studies included in our review that included a comparison of the
demographic characteristics of HRA and other CDHP enrollees with those
in traditional plans.
Demographic Characteristics of Policyholders in the Employer HRA and
PPO Groups:
Our analyses of enrollment data from the two large employers showed
that policyholders who switched into the HRA in 2003 were younger,
more likely to be male, and elect single coverage than those who
remained in the PPO plan. Specifically, we found that policyholders
from both employers' HRA groups were on average 3 years younger than
the PPO group in 2003. The HRA groups from both employers also had a
slightly higher percentage--2 to 5 percentage points--of male
enrollees than the PPO group in 2003. (See tables 10 and 11.)
Table 10: Average Age of Policyholders in the HRA and PPO Groups, 2003:
Employer: Public;
HRA: 47;
PPO: 50.
Employer: Private;
HRA: 39;
PPO: 42.
Source: GAO analysis of health plan enrollment data from a public and
a private employer. Policyholders 65 years and older were not included
in our analysis.
[End of table]
Table 11: Percentage of Male Policyholders in the HRA and PPO Groups,
2003:
Employer: Public;
HRA: 68;
PPO: 63.
Employer: Private;
HRA: 62;
PPO: 60.
Source: GAO analysis of health plan enrollment data from a public and
a private employer. Policyholders 65 years and older were not included
in our analysis.
[End of table]
We also found that policyholders in the HRA group were more likely to
elect single coverage compared with policyholders in the PPO. While
family coverage represented the majority of enrollment in both plans
offered by the public employer, the percentage of policyholders with
single coverage was higher for the HRA group than for the PPO group--
40 percent versus 31 percent, respectively, in 2003. This difference
was more pronounced at the private employer, where 57 percent of
policyholders in the HRA group elected single coverage versus only 38
percent of policyholders in the PPO group in 2003. (See table 12.)
Table 12: Percentage of Policyholders with Single Coverage in the HRA
and PPO Groups, 2003:
Employer: Public;
HRA: 40;
PPO: 31.
Employer: Private;
HRA: 57;
PPO: 38.
Source: GAO analysis of health plan enrollment data from a public and
a private employer. Policyholders 65 years and older were not included
in our analysis.
[End of table]
We also found that policyholders in the HRA group for the private
employer had higher average salaries compared with those in the PPO
group--$55,884 versus $51,762, respectively, in 2003. Data limitations
precluded us from assessing salary differences for the public employer.
Demographic Characteristics of HRA and Traditional Plan Enrollees:
Unlike our findings that policyholders in the HRA groups were younger
and more likely to be male than those in the PPO groups for the two
employers we reviewed, our analysis of national insurance carrier data
and findings from published studies found mixed evidence on the age
and gender of HRA enrollees compared with traditional plan enrollees.
However, similar to the HRA and PPO groups we reviewed, our analysis
of national insurance carrier data and published studies found that
HRA enrollees were more likely to elect single coverage than
traditional plan enrollees. Additionally, our analysis of published
studies found that HRA and other CDHP enrollees have higher salaries
than traditional plan enrollees.
Our analysis of data from the national insurance carriers found that
enrollees in the HRAs were younger than those in PPO plans, but our
review of published studies produced mixed evidence on the ages of HRA
and other CDHP enrollees relative to traditional plan enrollees. Our
analysis of national carrier data found that HRA enrollees were on
average 5 years younger than PPO enrollees in 2004. However, of the 23
studies that reported on age, 7 found that HRA and other CDHP
enrollees were younger than those enrolled in traditional plans, 8
found them to be about the same age, 5 found them to be older, and 3
found mixed results within their study populations. For example, 1
study found that HRA and other CDHP enrollees at one employer were
about 5 years younger, on average, than those in traditional plans,
whereas at another employer such enrollees were about the same age as
those in traditional plans.[Footnote 61]
Our analysis of national insurance carrier data and findings from
published studies also found mixed evidence on the gender of HRA
enrollees compared with those in traditional plans. Our analysis of
insurance carrier data found a roughly equal distribution of males and
females in the HRA and PPO plans--49 versus 48 percent, respectively,
in 2004. Similarly, of the 16 studies that assessed gender, 10 found
that HRAs and other CDHPs had a higher proportion of males than did
traditional plans, 1 found a higher proportion of women, and 5 found
either no difference or mixed results. For example, 1 study determined
through a survey of nearly 4,700 employees at a particular employer
that 41 percent of those who chose an HRA were male compared with 29
percent of those who chose a traditional plan.[Footnote 62]
We also found that HRA enrollees were more likely to elect single
coverage than traditional plan enrollees. Data from the national
insurance carriers showed that 44 percent of HRA enrollees compared
with 42 percent of PPO enrollees opted for single coverage in 2004.
Similarly, three of the five studies that reviewed coverage type among
HRA and other CDHP enrollees also found that they more often elected
single coverage than did those who enrolled in traditional plan types.
For example, one study of an employer's benefits data found that 51
percent of HRA enrollees had single coverage, compared with 37 percent
of traditional plan enrollees.[Footnote 63]
Finally, the published studies we reviewed consistently found that HRA
and other CDHP enrollees had higher salaries than did traditional plan
enrollees.[Footnote 64] Specifically, 14 of the 16 studies that
reported on salary came to that conclusion. For example, a case study
of a large employer found the average salary of HRA enrollees was
$93,409, compared with $69,555 for PPO enrollees.[Footnote 65]
[End of section]
Appendix VI: GAO Contact and Staff Acknowledgments:
Contact:
John E. Dicken, (202) 512-7114, dickenj@gao.gov:
Acknowledgments:
In addition to the contact named above, Randy DiRosa, Assistant
Director; Rashmi Agarwal; Laura Brogan; Martha Kelly; Suzanne Worth;
and Timothy Walker made key contributions to this report.
[End of section]
Related GAO Products:
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among Individuals with Higher Incomes. [hyperlink,
http://www.gao.gov/products/GAO-08-474R]. Washington, D.C.: April 1,
2008.
Employer-Sponsored Health and Retirement Benefits: Efforts to Control
Employer Costs and the Implications for Workers. [hyperlink,
http://www.gao.gov/products/GAO-07-355]. Washington, D.C.: March 30,
2007.
Health Savings Accounts: Early Enrollee Experiences with Accounts and
Eligible Health Plans. [hyperlink,
http://www.gao.gov/products/GAO-06-1133T]. Washington, D.C.: September
26, 2006.
Consumer-Directed Health Plans: Early Enrollee Experiences with Health
Savings Accounts and Eligible Health Plans. [hyperlink,
http://www.gao.gov/products/GAO-06-798]. Washington, D.C.: August 9,
2006.
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Rising Cost of Health Care Coverage. [hyperlink,
http://www.gao.gov/products/GAO-06-514]. Washington, D.C.: April 28,
2006.
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High-Deductible Health Plans and Health Savings Accounts. [hyperlink,
http://www.gao.gov/products/GAO-06-271]. Washington, D.C.: January 31,
2006.
Federal Employees Health Benefits Program: Early Experience with a
Consumer-Directed Health Plan. [hyperlink,
http://www.gao.gov/products/GAO-06-143]. Washington, D.C.: November
21, 2005.
[End of section]
Footnotes:
[1] Many health care plans require enrollees to pay a portion of their
health care costs up to a certain threshold, known as the deductible.
Once the deductible has been met, the plan pays most of the costs.
Among employer-sponsored health plans, the average annual deductible
in 2009 for HRA-based plans was $1,690 for single coverage and $3,422
for family coverage, and for HSA-eligible plans, the average annual
deductibles were $1,922 (single) and $3,734 (family), respectively.
See Henry J. Kaiser Family Foundation and Health Research &
Educational Trust, Employer Health Benefits: 2009 Annual Survey (Menlo
Park, Calif. and Chicago, Ill.: 2009).
[2] The Internal Revenue Service (IRS) held in 2002 that employer
contributions to HRAs were excludable from gross income for tax
purposes and therefore not to be treated as taxable income to
employees. IRS Rev. Rul. 02-41, 2002-2 C.B. 75; IRS Notice 02-45, 2002-
2 C.B. 93.
[3] In addition to HRAs, another type of account associated with CDHPs
is a health savings account (HSA). HSA-related tax advantages were
authorized by the Medicare Prescription Drug, Improvement and
Modernization Act of 2003. Pub. L. No. 108-173, §1201, 117 Stat. 2066,
2469 (codified in pertinent part at 26 U.S.C. §§ 106(d) and 223).
Employer contributions to HSAs are excludable from gross income and
employee contributions are deductible from federal income taxes.
[4] For the purposes of this report, traditional plans include PPO
plans, health maintenance organization plans, and other types of
comprehensive medical insurance.
[5] PPO plans generally allow enrollees to select their own health
care providers and reimburse either the provider or the enrollee for
the cost of covered services. Enrollees' costs are generally lower if
they obtain care from the plan's network of preferred providers.
[6] For the purposes of this report, we will refer to HRA-based plans
and their accounts as HRAs.
[7] Under the Patient Protection and Affordable Care Act, by 2014
states are to establish exchanges to facilitate the purchase of
qualified health plans, which could potentially include CDHPs. See
Pub. L. No. 111-148, Title I, 124 Stat. 119, 162, 173.
[8] Plan years were from January 1 through December 31 for the public
employer and from July 1 through June 30 for the private employer.
[9] We initially requested from both employers claims data for plan
years 2001 through 2005, covering the period 2 years before to 3 years
after the introduction of the HRA. At the time we made our request,
2005 was the most current and complete plan-year of claims data
available. Because some data from the public employer were originally
omitted, we subsequently requested them along with additional years of
data to enhance the timeliness of our study up to the most current and
complete plan-year of data then available, which was through 2007.
[10] Unless otherwise stated, enrollees refer to policyholders and
their dependents.
[11] For the public employer, the total number of enrollees ranged
from 967 to 1,013 in the HRA group and from 1.25 million to 1.62
million in the PPO group over the study period. For the private
employer, the number of enrollees ranged from 570 to 584 in the HRA
group and from 1,079 to 1,098 in the PPO group over the study period.
Group sizes fluctuated from year to year as enrollees who turned 65
years of age were removed from the analysis and the number of
dependents changed.
[12] For the purposes of this report, we will refer to the enrollees
included in these 31 studies as "HRA and other CDHP enrollees."
[13] Data from the public employer included both medical and pharmacy
claims, whereas data from the private employer included only medical
claims. We were not able to analyze pharmacy claims for the private
employer.
[14] The majority of Americans receive their health care coverage
through the private health insurance market. About 160.6 million of
the nearly 263 million individuals under age 65 in 2008 received
health care coverage through private, employer-sponsored health care
plans. See Paul Fronstin, "Sources of Health Insurance and
Characteristics of the Uninsured: Analysis of the March 2009 Current
Population Survey," EBRI Issue Brief, no. 334 (September 2009).
Employers can purchase coverage for their employees from an insurance
carrier or fund their own health care plans.
[15] Qualified medical expenses are identified under the Internal
Revenue Code. See 26 U.S.C. §§ 213(d), 223(d)(2)(A).
[16] Henry J. Kaiser Family Foundation and Health Research &
Educational Trust, Employer Health Benefits: 2008 Annual Survey (Menlo
Park, Calif. and Chicago, Ill.: 2008).
[17] Mercer, National Survey of Employer-Sponsored Health Plans: 2008
Survey Report (2009).
[18] HSA-eligible plans are also sold by health insurance carriers in
the individual health insurance market. According to a survey of
health insurance carriers, approximately 2.1 million individuals were
enrolled in an HSA-eligible plan in the individual market in January
2010, a 17 percent increase since January 2009. The same survey
reports that approximately 10 million people overall--both individual
and group markets--were covered by such a plan in January 2010. The
survey estimates enrollment in HSA-eligible plans, but does not
indicate the extent to which these enrollees have or contribute to an
HSA. See America's Health Insurance Plans Center for Policy and
Research, January 2010 Census Shows 10 Million People Covered by
HSA/High-Deductible Health Plans (Washington, D.C.: May 2010).
[19] The IRS definition of preventive care includes periodic health
evaluations, including tests and diagnostic procedures ordered in
connection with routine examinations, routine prenatal and well-child
care, immunizations, tobacco cessation programs, obesity weight-loss
programs, and various screening services.
[20] HRAs are generally set up as notional arrangements--employers do
not actually deposit funds into the accounts for their employees.
Instead, the employers reimburse employees for their medical expenses
as they occur.
[21] An out-of-pocket spending limit represents the maximum amount an
enrollee is required to pay toward the cost of covered services. The
out-of-pocket spending limit includes cost sharing, but does not
include premiums. Because IRS does not specify requirements for out-of-
pocket spending limits, some plans may cover all costs once
traditional coverage begins.
[22] HSA-eligible health plans operate similarly to HRAs with certain
exceptions. Unlike HRAs, HSA-eligible health plans must meet certain
statutorily defined criteria including a minimum deductible amount and
a maximum limit on out-of-pocket spending. Additionally, the enrollee,
rather than the employer, owns the account. Unlike most HRAs, HSAs are
portable, meaning that enrollees may take the account with them if
they leave their employer. Both enrollees and employers may contribute
to HSAs, when they are coupled with an HSA-eligible health plan, up to
IRS-specified contribution limits.
[23] We were not able to examine pharmacy claims data for the private
employer.
[24] A. Wilson and others, "More Preventative Care, and Fewer
Emergency Room Visits and Prescription Drugs: Health Care Utilization
in a Consumer-Driven Health Plan," Benefits Quarterly, vol. 24, no. 1
(2008): 46-54.
[25] The Henry J. Kaiser Family Foundation, National Survey of
Enrollees in Consumer Directed Health Plans (Menlo Park, Ca.: November
2006).
[26] See GAO, Federal Employees Health Benefits Program: Early
Experience with a Consumer-Directed Health Plan, [hyperlink,
http://www.gao.gov/products/GAO-06-143] (Washington, D.C.: Nov. 21,
2005).
[27] The average annual rate of change assumes that spending increases
or decreases at the same rate during each year between 2003 and 2007.
[28] Other services for the HRA and PPO groups included those provided
at a patient's home or by military treatment facilities; skilled
nursing facilities; ambulances; psychiatric facilities or mental
health centers; rehabilitation facilities; substance abuse facilities;
independent laboratories; or state, local, or rural health clinics.
[29] The average annual rate of change assumes that spending increases
or decreases at the same rate during each year between 2003 and 2005.
[30] For the HRA group, other services included those provided at a
patient's home or provided by ambulances or independent laboratories.
For the PPO group, other services included those provided at a
patient's home or provided by urgent care facilities or skilled
nursing facilities.
[31] Four of the nine studies reported on total spending, while five
studies reported separately on medical spending only.
[32] HealthPartners, Consumer Directed Health Plans Analysis (October
2007).
[33] The other two studies reported differences that were not
statistically significant.
[34] Cigna Choice Fund Experience Study (January 2009).
[35] R. Feldman and others, "Consumer-Directed Health Plans: New
Evidence on Spending and Utilization," Inquiry, vol. 44, no. 1 (2007):
26-40. This study found higher spending among HRA enrollees compared
to those in a traditional plan for 3 years. The results were
statistically significant for the second and third year only.
[36] Cigna Choice Fund Results Analysis (November 2006); Cigna Choice
Fund Experience Study (October 2007); and Cigna Choice Fund Experience
Study (January 2009).
[37] R. Feldman and others, "Consumer-Directed Health Plans: New
Evidence on Spending and Utilization."
[38] We refer to HRA-based plans and their accounts as HRAs. We refer
to traditional plans as those which include PPO plans, health
maintenance organization plans, and other types of comprehensive
medical insurance.
[39] Plan years were from January 1 through December 31 for the public
employer and from July 1 through June 30 for the private employer.
[40] The HRAs offered by the two employers were administered by the
same insurance carrier. The PPOs were administered by different
insurance carriers.
[41] We initially requested from both employers claims data for plan
years 2001 through 2005, covering the period 2 years before to 3 years
after the introduction of the HRA. At the time we made our request,
2005 was the most current and complete plan-year of claims data
available. Because some data from the public employer were originally
omitted, we subsequently requested them along with additional years of
data to enhance the timeliness of our study up to the most current and
complete plan-year of data then available, which was through 2007.
[42] Unless otherwise stated, enrollees refer to policyholders and
dependents.
[43] We included policyholders who joined their HRA or PPO plan within
the first 3 months of the 2001 plan year and those who withdrew within
the last 3 months of the public employer's 2007 plan year and the
private employer's 2005 plan year. For the public employer, we only
included policyholders who lived in the continental United States.
Data from the private employer did not contain address information and
some policyholders may have lived outside the continental United
States.
[44] At the beginning of each plan year, we removed from each of the
study groups from that point forward any enrollees who had reached age
65 in order to exclude Medicare beneficiaries. The number of
dependents also fluctuated from year to year due to life events such
as births and marriages.
[45] We refer to the enrollees included in these 31 studies as "HRA
and other CDHP enrollees."
[46] Data from the public employer included both medical and pharmacy
claims, whereas data from the private employer included only medical
claims. We were not able to analyze pharmacy claims for the private
employer.
[47] All claims data used in our analyses were final-action claims.
The public employer provided claims based on date of service during
our study period. The private employer provided claims based on date
of payment, but our analyses were based on dates of service covering
our study period. Some claims that were rendered but not paid during
our study period for the private employer may be missing.
[48] All spending and utilization analyses were conducted on a per
enrollee basis for each plan year.
[49] To understand other demographic differences between HRA enrollees
and traditional plan enrollees, we relied on an analysis of enrollment
data from the two large employers we reviewed and compared our results
to other national data sources and published studies. See appendix V.
[50] The portion of each claim paid by the enrollee includes
deductibles, copayments, or coinsurance. We did not capture any
contributions made by employers or employees towards the monthly
premiums as part of our spending calculations.
[51] The data systems used by the different health plans in our review
may not code their claims consistently for a service type.
[52] We examined prescription drug claims only for the public
employer; we were not able to analyze pharmacy claims for the private
employer.
[53] We used the nonseasonally adjusted medical care consumer price
index to express all spending in 2007 dollars. The medical care
consumer price index consists of two categories: medical care services
and medical care commodities. Medical care services include
expenditures for professional services, hospital and related services,
and health insurance. Medical care commodities include expenditures
for prescription and nonprescription drugs as well as medical supplies.
[54] Specifically, we examined inpatient hospital admissions,
outpatient visits, physician office visits, emergency room visits, and
prescription drugs filled.
[55] We identified radiology and pathology or laboratory procedures
using diagnostic and procedure information in the claims data. If a
procedure was preventive in nature, we did not identify it as a
diagnostic radiology or pathology or laboratory procedure. For
example, a mammogram was considered a preventive care service and not
a diagnostic radiology procedure. To identify preventive care
services, we developed a list of procedure, service, and diagnostic
codes commonly classified as preventive using Current Procedural
Terminology codes, Healthcare Common Procedure Coding System codes,
and International Classification of Diseases codes.
[56] We removed outlier claims that were plus or minus 3 standard
deviations from the mean for each year for each spending and
utilization variable we reviewed.
[57] We excluded claims that indicated a coordination of benefits
because we could not determine how much other insurance carriers paid
for the claim. As a result, our spending results do not reflect any
payments made by the HRA or PPO plans for these claims.
[58] We did not consider press releases, slide presentations,
abstracts, or testimonies in our review because we could not assess
the methodology used.
[59] We report demographic characteristics for policyholders less than
65 years of age using health plan enrollment data for the public and
private employers we reviewed. For the public employer, 446
policyholders were in the HRA group and 708,841 policyholders were in
the PPO group at the beginning of the 2003 plan year. For the private
employer, 288 policyholders were in the HRA group and 455
policyholders were in the PPO group at the beginning of the 2003 plan
year.
[60] We obtained demographic data from two large, national insurance
carriers active in the HRA market. These data represented about
209,000 policyholders and dependents under 65 years of age who were
continuously enrolled in an HRA in 2004. For comparison purposes, we
also obtained demographic data for about 650,000 policyholders and
dependents under 65 years of age who were continuously enrolled in a
PPO plan in 2004. These data were obtained from Medstat's MarketScan,
Commercial Claims and Encounters Database--a database which compiles
data from insurance carriers nationally.
[61] Express Scripts, What Happens to Prescription Drug Use After
Consumer Directed Health Plan Enrollment? (April 2007).
[62] J. Briggs Fowles and others, "Early Experience with Employee
Choice of Consumer-Directed Health Plans and Satisfaction with
Enrollment," Health Services Research, vol. 39, no. 4 (2004): 1141-
1158.
[63] J. Briggs Fowles and others, "Early Experience with Employee
Choice of Consumer-Directed Health Plans and Satisfaction with
Enrollment."
[64] Data from the national insurance carriers did not contain any
salary information.
[65] R. Feldman and others, "Consumer-Directed Health Plans: New
Evidence on Spending and Utilization," Inquiry, vol. 44, no. 1 (2007):
26-40.
[End of section]
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