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Consumer-Driven Health Plans Overtake HMOs

In 2011, consumer-driven plans beat out HMOs for first time; a quarter of companies may move to healthcare exchanges.

By Susan Kelly | Updated on September 28, 2012
doctor with shopping cartConsumer-driven health plans took a leap forward last year when, for the first time, more companies offered such plans than offer HMOs, according to a survey of nearly 2,000 companies by Aon Hewitt. Meanwhile, in a possible sighting of the next big trend in corporate health coverage, the survey shows that more than a quarter of companies say they may take a defined-contribution approach to healthcare within the next few years by giving employees a set amount of money to buy insurance on a private healthcare exchange.

Fifty-eight percent of the companies surveyed by Aon Hewitt offered some type of consumer-driven health plan (CDHP) last year, up from 41% the previous year, while just 38% offered an HMO, down from 41%. Preferred provider organizations (PPOs) are still more common than either CDHPs or HMOS and were offered by 79% of employers.

Maureen Fay, senior vice president and head of Aon Hewitt’s CDHP working group, says the change in part reflects employers’ paring back the number of their HMO offerings. “Over the past several years, employers have been doing a lot of consolidation of their HMOs,” she says, citing companies that have gone from offering 50 to 100 local HMOs down to just two national carriers.

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