Consumer Directed Health Plans: Small but Growing Enrollment Fueled by Rising Cost of Health Care Coverage

Consumer Directed Health Plans (CDHP) constitute a small but growing share of the private health insurance market. Publicly available survey data indicate that the number of enrollees and dependents with CDHP coverage increased from about three million in January 2005, to between about five million and six million in January 2006 - still a small share of the 177 million enrollees and dependents with private health insurance coverage. Many health insurance carriers offer CDHPs to employers and individuals. The number of employers offering CDHPs to their employees increased from about one percent in 2004, to four percent in 2005.

Large employers were more likely than smaller employers to offer a CDHP, and large employers were more likely to offer health reimbursement account (HRA)-based plans; whereas small employers were more likely to offer health savings account (HSA)-eligible plans. When employers offered a CDHP as one of two or more health plan options, the percentage of employees enrolled in the CDHP was generally lower than the percentage enrolled in the traditional plan. Most individuals enrolled in an HSA-eligible plan in 2004 and 2005, purchased the plan directly from a health insurance provider.

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