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Objective. To conduct site visits to study the early experiences of firms offering consumer-driven health care (CDHC) plans to their employees and firms that provide CDHC products. Data Sources/Study Setting. A convenience sample of three firms offering CDHC products to their employees, one of which is also a large insurer, and one firm offering an early CDHC product to employers. Study Design. We conducted onsite interviews of four companies during the spring and summer of 2003. These four cases were not selected randomly. We contacted organizations that already had a consumer-driven plan in place by January 2002 so as to provide a complete year's worth of experience with CDHC. Principal Finding. The experience of the companies we visited indicated that favorable selection tends to result when a CDHC plan is introduced alongside traditional preferred provider organization (PPO) and health maintenance organization (HMO) plan offerings. Two sites demonstrated substantial cost-savings. Our case studies also indicate that the more mundane aspects of health care benefits are still crucial under CDHC. The size of the provider network accessible through the CDHC plan was critical, as was the role of premium contributions in the benefit design. Also, companies highlighted the importance of educating employees about new CDHC products: employees who understood the product were more likely to enroll. Conclusions. Our site visits suggest the peril (risk selection) and the promise (cost savings) of CDHC. At this point there is still far more that we do not know about CDHC than we do know. Little is known about the extent to which CDHC changes people's behavior, the extent to which quality of care is affected by CDHC, and whether web-based information and tools actually make patients become better consumers. Key Words. Employer-sponsored health insurance, health reimbursement arrangement, cost sharing, Consumer-driven health care (CDHC) has been touted as the salvation of our health care system (Herzlinger forthcoming)--or as the hastening of its demise (Shuit 2003). Proponents point to facets that [...]

Using both employer- and beneficiary-level data, we examined trends in employer-sponsored retiree health insurance and prospects for future coverage. We found that retiree health insurance has become less prevalent over the past decade, with firms reporting declines in the availability of coverage, and Medicare-eligible retirees reporting lower rates of enrollment. The future of retiree health insurance is uncertain. The forces discouraging its growth--rising premium costs, a slower economy, judicial challenges, and an uncertain Medicare+Choice (M+C) program and policy agenda--far outweigh the forces likely to encourage expansion., INTRODUCTION Former employers are a major source of health insurance for older adults, particularly for those who retire before becoming eligible for Medicare. To early retirees, defined as those who [...]

Premium caps on health insurance as envisioned by Pres Clinton under his Health Security Act would either quiet or exacerbate the health insurance underwriting cycle. This six-year cycle includes three years of profit and three years of losses, and affects premium pricing in a cycle that lags behind by two years. The Clinton provision limiting insurance premium rate increases to the Consumer Price Index and 1.5% would require dramatic financial changes in the insurance industry, as premiums rose 3.5 times more than inflation between 1986 and 1993., Shortly after Harry Truman created the Council of Economic Advisers in 1946, the story goes, he met with members of the council to seek their advice about prospects for the [...]

National health care reformers considering premium caps on health insurance rarely take into account health insurance underwriters' profitability cycles. A little-understood six year cycle encompassing three years of profits and three years of losses has been occurring regularly since the 1960s. The cycle triggers price cycles that lag about two years behind. Policymakers ought to consider price caps in light of these cycles., Shortly after Harry Truman created the Council of Economic Advisers in 1946, the story goes, he met with members of the council to seek their advice about prospects for the [...]

The Small Business Health Options Program (SHOP) of the Affordable Care Act offers employers of 50 or fewer workers a range of insurance carriers and plans and lower premiums than [...]

The costs and benefits of collectively bargained family coverage plans, relative to group health plans under single employers without collective bargaining, are considerably better for the employee. Premiums for single [...]