Too much choice? Workers not spending much time on health plan decisions

Employees with health plans are living two lives. On the one hand, they are not spending time on choosing their plan despite having an abundance of choice. These are some of the findings in the 18th Annual Consumer Engagement in Health Care Survey (CEHCS) that were published recently by the Employee Benefit Research Institute (EBRI) and Greenwald Research.

For example, most enrollees (72%) spent less than an hour on their health plan during open enrollment. High deductible health plan (HDHP) enrollees spend more time than traditional plan enrollees.  About 1 in 5 privately insured Americans were automatically re-enrolled, though just 16% of high deductible plan owners report they had passive enrollment.

Why are Americans not taking the time to get a closer look at, what is arguably, their most important benefit?

“I can think of a number of reasons,” says Paul Fronstin, Ph.D., Director, Health Benefits Research with EBRI. “First, 20% of enrollees are automatically re-enrolled in their health plan each year. They do not have to take any action. Assuming they are satisfied with their plan, which most are, it is easiest to remain with the plan you know. Second, comparing plans can be daunting, especially if you have more than two health plans to choose from. Third, I have to believe that people intend on spending more time on their health plan choice, but then real life gets in the way.”

Interestingly, satisfaction with open enrollment is high; 90% were either extremely or very satisfied (58%) or somewhat satisfied (32%) with the overall process. Nearly all were satisfied with the various aspects of open enrollment.

And many people have an abundance of choice with six in 10 individuals reporting that they have a choice of health plan. HDHP enrollees were more likely than traditional plan enrollees to report that they had a choice. Twenty-nine percent of HDHP enrollees reported that they had three health plans to choose from, compared with 17% among traditional plan enrollees.

When it comes to their health plan, most people thought that the following aspects were very or somewhat important:

• the network of health care providers,
• low out-of-pocket costs,
• low premiums,
• prescription drug coverage, and
• simple to understand.

“Only 47% reported that a good network of mental health providers is important,” explains Fronstin. “I wasn’t surprised by the much lower number as it might not be important to people who do not see the need for mental health services.”

Eight in 10 enrollees reported feeling financially secure. HDHP enrollees were slightly more likely than traditional plan enrollees to report feeling financially secure. Nearly one-third of enrollees reported that premiums and out-of-pocket costs have increased in the past year. HDHP enrollees were more likely than traditional plan enrollees to report higher out-of-pocket costs. Higher health care costs have impacted many aspects of personal finances, such as other spending and use of medical services.

Fronstin adds that 27% of respondents reported that inflation contributed a lot to stress. “Inflation stood out from the other contributors we examined (i.e. balancing work/life, caregiving, paying for care, politics, work, and heath care needs).”

Perhaps because of inflation or simply as a precautionary measure, Over one-half (58%) of individuals reported opening their HSA to save for future out-of-pocket expenses. Similarly, 57% opened their HSA to save on taxes.

While 32% reported using the accounts as investment accounts, 18% reported viewing the account as a checking account. Most (69%) reported viewing the HSA as a savings account.

“Open enrollment is the time of year when employees get to evaluate their plan options,” explains Fronstin. “Employees should consider the trade-offs between premiums and cost sharing when making health plan decisions.”