ENROLLMENT IN CONSUMER DIRECTED HEALTH PLANS GREW

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Very Large Employers Lead Increase in CDHP Adoption, AAPPO Study Shows

Washington, D.C., April 25, 2011 – Enrollment in Consumer-Directed Health Plans (CDHPs) grew by 22 percent in 2010, up from 23 million in 2009 to 28 million last year according to an analysis of the Mercer National Survey of Employer Sponsored Health Plans commissioned by the American Association of Preferred Provider Organizations (AAPPO).

While PPO enrollment has remained steady at 69 percent since 2008, CDHPs, which provide consumers more control over the cost of their health care, were the only type of plan to show enrollment growth, from 7 in 2008 to 11 percent in 2010. This trend corresponds with a slight, but steady decline in HMOs over that same period.

“Last year’s economic slowdown combined with the rising cost of health care forced employers of all sizes to seek innovative ways to reduce what they spend to cover their employees. Given the cost savings inherent in the consumer-directed model, it’s clear that employers -- especially our largest ones -- are increasingly looking to CDHPs to do that” said Karen Greenrose, AAPPO President and CEO. “In today’s tough environment, CDHPs -- which are predominantly built on PPO networks -- offer the affordability, choice and access that employers and consumers alike are looking for.”

"From the numbers that have been released, it is apparent that the CDHPS are filling both a need and a void in the marketplace,” said Tennessee Representative and House Energy and Commerce Health Subcommittee Member Marsha Blackburn. “Consumers want greater control over their healthcare decisions and they want it at a more affordable and manageable cost."
Among the other key findings in the report released today by AAPPO is that, while employers of all sizes increased their CDHP offerings, very large employers -- or companies with more than 20,000 employees -- were the major driver of the rise in CDHP offerings in 2010. The 51 percent of the nation’s largest companies offered their employees a CDHP model compared with just 43 percent in 2009. Then, small employers (10 – 499 employees) led the charge with a jump from nine to 15 percent.

Further, employers of all sizes surveyed expect to increase their CDHP offerings in the future, pointing to the likelihood that this trend of growth will continue in the years to come.

Of the 254 million Americans that the U.S. Census Bureau estimates have private or government health insurance, 203 million were enrolled in PPO-based plans, including point-of-service and consumer-driven plans. HMO enrollees represented the remaining 51 million (or 19 percent).

To view the entire study, please visit www.aappo.org.

About the American Association of Preferred Provider Organizations (AAPPO)
Founded in 1983, AAPPO (www.aappo.org) is the leading national association of preferred provider organizations (PPOs). PPOs put control for medical decisions in the hands of the physician and patient, resulting in easy access to the right care, provided by the right doctor, at the right time. AAPPO creates a forum for discussion and dissemination of PPO best practices.

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