CDHC Cuts Prescription Drug Costs

Overall medical spending, including spending on prescription drugs, fell for about half of employers offering workers consumer-driven health care plans (CDHC), according to a new survey by The Segal Co. Sixty-five percent of the 27 companies surveyed in late 2004 also reported an increase in the use of generic medications by employees enrolled in CDHC.

The most common CDHC offered by the surveyed businesses was a high-deductible health plan combined with a health reimbursement account (HRA). Only one of the employers offered a health savings account (HSA), Segal reported.

Ninety-six percent of employers offered such plans to encourage employees to choose more cost-effective medical care, according to the survey. An equal percentage also offered the choices to help reduce health plan costs. More than half the firms surveyed had offered CDHC for at least two years. Eight-one percent offered the plans as an option for coverage, while 48 percent provided financial incentives for employees to enroll in them.

Nearly three-quarters of those surveyed reported “no significant growth” in CDHC enrollment in 2004 compared with 2003. The employers surveyed are attempting to educate their workers about CDHC. About two-thirds invested “somewhat more or significantly more” in educating employees about these options than about other benefit changes.

Workers with higher incomes and lower users of health care were more likely than their colleagues to enroll in CDHC.