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Who Switches Health Plans

By April 6, 2017Commentary

Although it is a decreasing practice, most large employers still offer employees a choice of multiple insurance carriers and health plans.  It is of obvious interest to the carriers to understand how often people switch plans and why.  The Employee Benefits Research Institute examines the issue in a new brief.  (EBRI Brief)   One large employer with over 20,000 workers, which went from offering four health plans from the same carrier in 2014 to ten plans from three carriers in 2015, is the source of data for the brief.  In 2014 the choices were a health savings account plan, an exclusive provider organization one, a preferred provider plan and a traditional health maintenance organization.  In 2015, there were additional HSA, EPO and PPO plans available.  When this expansion of health plan choices occurred, one-third of participants switched from their current plan.

Workers enrolled in the HSA plan in 2014 were most likely to change plans; half of them did so, compared with 27% of EPO members, 24% of PPO ones and 13% of those in the HMO option.  However, the HSA enrollees who switched were most likely to go to another HSA plan, just one from a different carrier.  88% of switchers did this.  Similarly, 63% of EPO members who switched in 2015 went to another EPO plan with a different company and 72% of PPO enrollees just choose a different PPO plan.  Only 5% of HSA members who switched went to a different plan type with the same carrier and 7% changed both plan types and carrier.  Older workers were less likely to switch plans.  High income workers with single coverage were more likely to switch than lower paid ones, but high income employees with family coverage were less likely to.  More use of office visits for primary care or specialists was associated with less switching as well.  The primary lesson seems to be that employees are more likely to switch carriers than plan types, indicating dissatisfaction with the current carrier is the main reason for changes.

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