Employee Choice of High-Deductible Health Plans

Qing Ye, Purdue University

Abstract

High-deductible health plans (HDHPs) offer an alternative to traditional health insurance plans for many employers in face of rapidly rising health insurance costs. However, employees’ HDHP choices over time have not been comprehensively studied. By analyzing five-year claims and administrative information from a large employer in the U.S., we classified employees into groups with distinct patterns of HDHP choices using group-based trajectory models. We also identified employee characteristics associated with HDHP choice behaviors over time and evaluated the potential of risk segmentation during the five-year period. We identified four groups of employees based on their longitudinal patterns of HDHPs choices: early HDHP adopters, late HDHP adopters, HDHP non-adopters and HDHP abandoners. We found that salaried and healthier employees were more likely to be early HDHP adopters than late adopters. Employees with spouse or family in the coverage were more likely to be late HDHP adopters than early adopters. We also found increased risk segmentation between HDHP and preferred provider plans (PPO) enrollees over the five-year period. These findings on how employees respond to health plan changes over time can help employers with health plan benefit design.

Degree

M.S.I.E.

Advisors

Yih, Purdue University.

Subject Area

Behavioral Sciences|Health care management

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