The Association of Out-of-Pocket Spending and Health Status With Consumer-Directed Health Plan Choice

This study examines how health status and experiences with cost sharing affect consumers' choices between managed care and consumer-directed health plan (CDHP) options. Human resources and claims system information were obtained from a single, large multistate employer through a third-party firm that extracted, merged, and deidentified the data for a final sample of 9,616 insured households. Multinomial logistic regression was used to estimate plan choice between a managed care preferred provider organization and two forms of CDHP. Andersen's Behavioral Model guided the cross-sectional, nonexperimental ex post facto design.Results indicate that cost sharing and health status have minimal effect on CDHP choice when operationalized as a continuous measure. However, a nonlinear association is suggested when examining the lowest and lower cost-sharing and health status groups. Enrollees in the lowest cost-sharing and best health status groups are most likely to choose a CDHP option offering a health savings account, while those in the lower cost-sharing and better health status groups are most likely to opt for a CDHP that includes a health reimbursement arrangement.This study supports the assessment that CDHPs benefit from favorable selection. Results also suggest that previously experienced cost sharing is a greater factor than health status when choosing a CDHP, particularly for those who are less healthy and who have experienced greater out-of-pocket spending. Employers should consider enrollees' experiences with healthcare plans, as these may influence plan choice and suggest features most important to employees, which can also influence healthcare-related behaviors.