Consumer-driven Health Plans Membership Continues to Grow

UnitedHealth sees explosion in HSA and HRA enrollments

San Francisco Business Times - June 16, 2006

by Chris Rauber

Minnesota-based UnitedHealth Group said membership in its consumer-driven health plans continues to soar, both in California and nationwide.

Membership nationally has surpassed 1.75 million enrollees, UnitedHealth said June 8. In California, that translates into 118,000 people enrolled in so-called "CDHPs", up more than 74 percent from the prior year, said Cheryl Randolph, a spokeswoman for UnitedHealth's Cypress-based PacifiCare unit. She said the company doesn't break out those numbers by region.

Of those 118,000 enrollees, she said, 25,000 have signed up for a health savings account or HSA and 93,000 for a related health reimbursement account.

Nationally, membership in its HSA and HRA plans jumped 75 percent from June 2005, with more than 750,000 new individuals participating in the last year.

"Consumers are becoming much more comfortable with account-based plan designs," said Mike Tarino, CEO of Definity Health, the UnitedHealth unit that manages these health plans. "More than 13,000 employers have already turned to us to incorporate a consumer-driven design into their benefits strategy, and our CDH membership among large, national employers alone recently topped 1 million."

Still, all is not rosy in the consumer-driven health plan world. Other sources say that nationally, only about 1 in 4 enrollees in such plans actually opens and funds an HSA, although the data is a bit murky. Without a linked HSA or related account, a consumer-driven plan is just a high-deductible insurance offering by another name, critics say. PacifiCare's Randolph cautions that it's just five and a half months into the year, however, "and believe it or not some people simply don't get around to opening the account right away."

The company's data on companies with 100 to 5,000 employees shows that when the employer contributes to the HSA, 89 percent of employees open an account, and 60 percent fund it.

Chris Rauber can be reached at (415) 288-4946 or crauber@bizjournals.com