	Background

CDHPs are relatively new health care benefits plan designs that are  offered in various forms, including that of an HDHP coupled with an HSA. The Consumer-Directed Health Plan Concept

While insurers and employers offer several variants of CDHPs, these plans  generally include three basic precepts—an insurance plan with a high  deductible, a savings account to pay for services under the deductible, and  enrollee decision support tools. Decision support tools. They may also  provide enrollees with information to assess the quality of health care  providers and the prices for health care services. In 2005, 14 HDHPs  coupled with HSAs were first offered. OPM  requires that the plans cover preventive health services before the  deductible has been met. OPM requires all HDHP carriers to offer health care decision  support tools to enrollees. About 69 percent of HDHP enrollees were male, compared to 59 percent in  both the other new plan and all FEHBP plans, and about 47 percent of  HDHP enrollees had individual coverage, compared to 35 and 37 percent  for the other new plan and all FEHBP enrollees, respectively. HDHP Enrollees Were Younger and Included Fewer Retirees Than Enrollees in All FEHBP Plans

The average age of HDHP enrollees was younger than all FEHBP plan  enrollees, but was similar to that of enrollees in another new FEHBP plan. Differences were largely due to  fewer retirees selecting the HDHPs. HDHP Enrollees Had Higher Federal Salaries and Were More Likely to Select Individual Plans Than Other FEHBP Enrollees

HDHP enrollees who were actively employed by the federal government  earned higher federal salaries than other active federal employees in the  FEHBP. The share of enrollees earning federal incomes of $75,000 or more  in 2005 was 43 percent for HDHPs, compared to 14 percent for the other  new plan and 23 percent for all FEHBP plans. FEHBP HDHPs Generally Covered the Same Services as Traditional Plans, but Enrollees’ Financial Responsibilities Usually Differed

HDHPs generally covered the same services as those covered by their  traditional plan counterparts; however, enrollees’ financial responsibilities  usually differed. In addition, relative to traditional plans,  HDHP cost sharing after the deductible was comparable or lower for  preventive services and prescription drugs. Cost sharing was mixed for  physician office visits and hospital stays—higher than the carriers’  traditional plans in some instances and the same or lower in others. Two  of the HDHPs had higher out-of-pocket spending limits than their  traditional plan counterparts, and in most cases the HDHPs had lower  premiums. The Extent to Which FEHBP HDHPs Provided Online Access to Provider- Specific Quality and Cost Information Varied

The HDHPs provided varying degrees of provider quality data. Two of the  three plans provided data on their Web sites for several measures to assess  hospital quality, including outcomes data, procedure volumes, and patient  safety ratings, and the other plan provided links to Web sites that  contained this type of information. Cost information provided by the three multistate plans was limited. One  of the plans provided average hospital cost estimates and two provided  average physician cost estimates for a limited number of services. Two of the three plans provided access  to average retail prescription drug prices and estimates of out-of-pocket  costs for drugs, and all three plans provided actual prices for drugs  purchased through the mail-order pharmacy services offered by the plans. None of the plans provided the actual payment rate the plan had  negotiated with particular retail pharmacies. Some of this information may  become available in the future. Two of the three largest HDHPs were  developing physician-specific patient satisfaction ratings to help enrollees  assess physician quality, and one had initiated a pilot project to provide  enrollees with the actual, negotiated prices they would pay for certain  services performed by a particular provider. OPM expressed interest in our findings on the differences in  characteristics of first-year HDHP enrollees compared to traditional  FEHBP plan enrollees, and said that it would monitor enrollment trends  over time to assess whether certain individuals—such as younger or  healthier individuals—disproportionately enroll in HDHPs. OPM also said  that it would continue to encourage plans to expand the decision support  information they provide to enrollees, including the pricing of health care  services. Appendix I: Comments from the Office of Personnel Management
Why GAO Did This Study

The Federal Employees Health Benefits Program (FEHBP) recently began offering high-deductible health plans (HDHP) coupled with tax-advantaged health savings accounts (HSA) that enrollees use to pay for health care. Unused HSA balances may accumulate for future use, providing enrollees an incentive to purchase health care prudently. The plans also provide decision support tools to help enrollees make purchase decisions, including health care quality and cost information. Concerns have been expressed that HDHPs coupled with HSAs may attract younger, healthier, or wealthier enrollees, leaving older, less healthy enrollees to drive up costs in traditional plans. Because the plans are new, there is also interest in the plan features and the decision support tools they provide to enrollees. GAO was asked to evaluate the experience of the 14 HDHPs coupled with an HSA that were first offered under the FEHBP in January 2005. GAO compared the characteristics of enrollees in the 14 HDHPs to those of enrollees in another recently introduced (new) plan without a high deductible and to all FEHBP plans. GAO also compared characteristics of the three largest HDHPs to traditional FEHBP plans offered by the same insurance carriers, and summarized the information contained in the decision support tools made available to enrollees by these three plans.

What GAO Found

FEHBP HDHP enrollees were younger and earned higher federal salaries than other FEHBP enrollees. The average age of HDHP enrollees (46) was similar to that of the other new plan (47) and younger than that of all FEHBP enrollees (59). These differences were largely due to a smaller share of retirees enrolling in the HDHPs and the other new plan. HDHP enrollees earned higher federal salaries compared to other enrollees. Forty-three percent of HDHP enrollees actively employed by the federal government earned federal salaries of $75,000 or more, compared to 14 percent in the other new plan and 23 percent among all FEHBP plans. In addition, nonretired HDHP enrollees were more likely to be male and to select individual rather than family plans. The three largest FEHBP HDHPs generally covered the same range of services--including preventive services--as their traditional plan counterparts; however, enrollees' financial responsibilities usually differed. Compared to the traditional plans, the HDHPs had higher deductibles. HDHP cost sharing was the same or lower for preventive services and prescription drugs, and all plans covered preventive services before the deductible. Prescription drugs in the HDHPs were subject to the deductible, while they were generally exempt from the deductible in the traditional plans. HDHP cost sharing varied with respect to nonpreventive physician office visits and inpatient hospital stays. Two of the three HDHPs had higher out-of-pocket spending limits, and HDHP premiums were lower on average than the traditional plans. The extent to which the three largest FEHBP HDHPs made available provider quality and health care cost information was limited and varied. Two of the three plans provided several hospital-specific measures of quality on their Web sites, including the volumes of procedures provided by the hospitals and the outcomes of those procedures, and the other plan provided links to other Web sites containing such information. Regarding physician-specific quality data, one plan provided a single measure. One of the plans provided average hospital cost estimates and two provided average physician cost estimates for selected services, but none provided the actual rates an enrollee would pay that the plan had negotiated with providers. Regarding prescription drugs, two of the three plans provided the average retail pharmacy drug costs, but none provided the actual negotiated rates an individual would pay at a particular retail pharmacy. In commenting on a draft of this report, the Office of Personnel Management (OPM) said that it would monitor enrollment trends over time to assess whether certain individuals--such as younger or healthier individuals--disproportionately enroll in HDHPs. OPM also said it would continue to encourage plans to expand the decision support information they provide to enrollees, including the pricing of health care services.