Employer-provided health coverage has long been viewed as an important benefit and safety net. However, this is often no longer the case
NEW YORK (PRWEB) October 1, 2007
Booz Allen's analysis is the result of interviews with executives from leading Blue Cross Blue Shield and national health plans, as well as data and insights from industry trade associations, policy groups and government agencies. The findings point to the urgent need for a radical restructuring of the U.S. healthcare system as the move towards greater consumer cost responsibility - frequently touted as an integral part of the solution to rising health costs - is even today far more widespread than consumer-driven health plan enrollment data show.
"Giving consumers more cost responsibility in a broken wholesale healthcare market will not work," said Gary Ahlquist, Booz Allen senior vice president. "The supply side of healthcare needs to be restructured such that patients can shop by comparing value. Consumers will also need real options for healthcare delivery and incentives to adopt healthy behaviors, along with new insurance and financial services products to help finance their care."
As employers of all sizes weigh how they can continue to affordably provide health coverage to their employees, and the nation searches for solutions to cover the uninsured, Booz Allen finds:
Many consumers are being forced to spend more of their income on healthcare. Today, more than 20 percent of the privately insured, some 38 million people, face out-of-pocket healthcare expenses that account for more than 10 percent of their after-tax incomes.
More than 15 percent of the privately insured are already enrolled in a high-deductible health plan--including coverage acquired through an employer or individually. Ten percent of people enrolled in "conventional" plans such as a PPO faced deductibles exceeding $1,000 in 2007, up from only four percent in 2002. At the same time, enrollment in consumer-driven health plans paired with a tax-exempt Health Savings or Health Reimbursement Account is projected at five to six percent of the market in 2007.
Conventional plans with high deductibles and high out-of-pocket costs will continue to dominate. By 2020, Booz Allen predicts that enrollment in conventional plans with these high-cost features could reach 35 to 40 percent of the privately insured market, while enrollment in consumer-driven health plans paired with a tax-exempt Health Savings or Health Reimbursement Account could reach 20 to 25 percent.
Calls for mandatory coverage may force more employers and individuals to buy high-cost plans, which may not improve access to care. As employer coverage declines, the number of uninsured in the U.S. grew nearly five percent from 2005 to 47 million in 2006, according to data from the U.S. Census Bureau. States that mandate universal health insurance to help consumers gain coverage in the form of high deductible plans may ultimately have little impact as the out-of-pocket costs could prove too high a threshold for many to access care.
"Employer-provided health coverage has long been viewed as an important benefit and safety net. However, this is often no longer the case," said David G. Knott, senior vice president at Booz Allen. "Even today, more than half of people enrolled in high-cost plans have no other healthcare option available to them. As the burden of healthcare costs increasingly shifts to the individual, consumers need solutions to ensure they can receive the care they need."
A report on this analysis, "Healthcare Consumerism: Trends in Consumer Cost-Sharing," is available on the Booz Allen web site.
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