Provider Networks, Premiums Are Key Factors in Health Plan Choice

July 18, 2012 — When given a choice, most individuals with traditional health coverage say they chose that option because it offered a good network of providers, according to findings by the Employee Benefit Research Institute (EBRI).

In contrast, among those with consumer-driven health plans (CDHPs), most cited the lower premiums and opportunity to save money in a health account.

While close to half of all private-sector workers who have health insurance are offered a choice of health plans, most of those with a choice work for large firms, according to the report.

"Most Americans get their health insurance coverage from employment-based plans, yet most employers do not offer a choice of health plans," said Paul Fronstin, director of EBRI's health research and education program and author of the report. "Health plan choices are likely to expand via the expansion of insurance exchanges under the Patient Protection and Affordable Care Act, so it's important to know how people make their decisions when they do have a choice."

Among the findings:

  • Half of CDHP enrollees reported that they chose that offering because of the lower premium, while 45% reported that the opportunity to save money in the account for future years was a primary reason.
  • Among individuals with traditional health coverage, 39% cited the good network of providers and 32% reported the low out-of-pocket costs as the main reasons for enrolling in the plan.

The analysis examines issues related to private health insurance exchanges, possible structures of an exchange and funding, as well as the pros and cons of adopting them. Full results are published in the July EBRI Notes, "Private Health Insurance Exchanges and Defined Contribution Health Plans: Is It Déjà Vu All Over Again?"

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