Enrollment of large-company workers in high-deductible plans reaches a historic high

• Nearly half of large-company workers have moved into high-deductible plans.
• Fewer large employers are offering such plans as the only option.
• The share of large employers offering concierge services is increasing from 39% in 2019 to a planned 60% in 2020.

The share of covered workers enrolled in high-deductible health plans (HDHPs) at large employers reached 47% in 2019.

HDHP enrollment increased from 35% of such workers in 2018 and 28% in 2017, according to annual tracking survey data from the National Business Group on Health (NBGH), which queries large employers annually on healthcare trends.

Employers in recent years increasingly have expressed skepticism that such plans benefit their employees, after many companies embraced them as a cost-saving strategy. The exposure to large deductibles did not drive the type of shopping and consumer behavior that employers had anticipated and instead often led employees to skimp on both needed and unneeded care. Hospitals have raised concerns that HDHPs leave more patients unable to cover their out-of-pocket costs, leading to an increase in hospital bad debt.

The signup surge surprised Brian Marcotte, president and CEO of NBGH, who noted the share of large companies offering only HDHPs has declined (from 39% to 25%) over the last two years.

Despite HDHPs’ decreased appeal to employers, the increasing enrollment by workers has been echoed in other recent surveys, including a December 2018 finding by the Employee Benefits Research Institute (EBRI) that 46% of all workers with employer-sponsored health insurance were enrolled in such plans.

Who are HDHP enrollees?

Although NBGH does not yet collect data to explain the increasing appeal of HDHPs to workers, EBRI focused on identifying the characteristics of such enrollees compared to traditional health plan enrollees:

• HDHP enrollees collectively had higher incomes and higher education.
• Nearly 30% of HDHP enrollees had a household income of at least $150,000, compared with 17% in traditional plans.
• Nearly half of HDHP enrollees (45%) had a college degree (versus 28%) and 27% had a graduate school degree (versus 18%).

Cost-control efforts become more widespread

Employers were not focused on controlling costs specifically for workers enrolled in HDHPs, Marcotte said, but they continue to expand several types of programs that could mitigate costs.

Among employers surveyed, planned 2020 offers of such assistance programs include:

• 78% to offer medical decision support or second opinion services (versus 71% in 2019)
• 73% to offer employee-advocacy tools (versus 65%)
• 60% to offer concierge services for navigating the health system (versus 39%)

Hostility to ‘Medicare for All’ emerges

Large employers expressed deep concerns about a move toward a single-payer system, which proponents often describe as “Medicare for All.” The opposition runs counter to the pitch of some advocates that a single-payer system would help companies because it would alleviate high healthcare costs.

Employers’ reactions to “Medicare for All” include:

• 47% believe it will increase healthcare costs of employees
• 56% believe it will reduce healthcare quality
• 57% believe it will increase overall healthcare costs
• 81% believe it will increase taxes

An expansion of Medicare eligibility to people younger than 65 was opposed by a plurality (45%) of employers. However, 23% would support an eligibility expansion to enrollees starting at age 50 or 60.

Other noteworthy trends emerge in the survey

Employers appear more interested in actively driving changes in the healthcare delivery system.

The largest change from 2019 to 2020 benefits was a shift away from a “wait and see” approach (from 19% in 2019 to 12% in 2020) to implementing new policies suggested by health plans and pharmacy benefit managers (from 32% in 2019 to 41% in 2020).

There was no increase in the share (16%) planning to drive delivery system changes through accountable care organizations, so-called high-performance networks or centers of excellence. Another 26% (largely unchanged) plan to undertake such changes by 2022 as well as implement virtual and digital care, care navigation or concierge services.