PPO's Gaining Popularity Among Health Insurance Consumers

Nov 28, 2007

It has been said, "as goes Maine so goes the nation". Well if the Northeast is any indication then it seems that PPO's are becoming the most popular type of health insurance plan, according to a recent study.

The survey was conducted nationwide, but it found that employees in the Northeast are selecting PreferredProvider Organizations over most other types of health insurance coverage. This is an interesting finding inlight of the recent upsurge in popularity of companies switching over to so-called consumer-driven healthplans. The survey was conducted by United Benefit Advisors, a consulting organization with affiliatesnationwide. HR Benefit Advisors Ltd., who conducted the survey of over 11,000 workers in the Northeast, foundthat PPO's' were chosen by workers almost 50% of the time, among workers offered a choice of health plans. Itseems the Northeast is catching up to the rest of the country where PPO's' already have a commanding lead inpopularity over other health insurance plans. In the west, more that 51% of workers select PPO health insurancecoverage when given a choice. In the Southeast that number is almost 71%.

The highly touted low-cost Consumer Driven High Deductible health plans were chosen by less than 5% ofNortheast workers. These high deductible consumer driven health plans were first introduced around 2003, buthave been gaining popularity with employers of late because of their lower costs. The CDHP's, as they havebecome to be known, couple high-deductible health insurance policies with health savings accounts (HSA's).Though being pushed by the current administration and the health insurance industry as the surest way to reducehealth insurance costs, the consumer-driven model is not taking root as quickly as anticipated. Acceptance ofthe CDHP's are low, only 10 percent in the Central States and a meager 2.4% rate of adoption in the West.

Not surprisingly the most expensive healthcare plans, Fee-for-Service plans are the least-popular healthinsurance options nationwide according to the study. Average enrollment in Fee-for-Service plans is less thantwo percent throughout the country, and is less than 1% in places like the Northeast.

The study also found that in an effort to contain costs, many employers are making their employees pay alarger share of their health insurance premiums. The survey also found that other measures to lower the cost ofhealth insurance are becoming popular among many employers, including wellness programs such as weight control,stress management and smoking cessation programs.