Workers choose health care limits to cut costs

updated 6:39 p.m. ET March 24, 2005

NEW YORK - Americans with employer-sponsored health insurance are becoming more willing to accept limits on their choice of providers in order to save on their medical expenses, a new study found.

The amount of Americans with employer-provided coverage who would trade choice of doctors and hospitals for lower out-of-pocket costs rose to 59 percent in 2003 from 55 percent in 2001, according to a new study by the Center for Studying Health System Change.

The jump is likely a result of employers increasingly shifting rising health care costs to their workers in the form of higher premiums, deductibles and co-payments for doctor visits and prescription drugs, said Paul Ginsburg, the president of the Center, a Washington D.C.-based policy research organization.

Ginsburg said the survey results were surprising because consumer attitudes about a preference between choice and cost were stable through 1997 and 2001. Indeed, there was enormous consumer backlash against restrictive managed care policies during the 1990s, paving the way for plans with a wide array of options. But Ginsburg said employers have been increasing cost-sharing since 2002 and now consumers are feeling the pinch.

The study found that low-income consumers were more likely to sacrifice choice to save on costs. Two-thirds of adults with income below $36,800, which was double the federal poverty line for a family of four in 2003, were willing to accept limitations. That compares with 54 percent of adults making at least $73,600, or 400 percent of the poverty level for a family of four.

Despite the survey, Ginsburg doesn't see a rush back to strident managed care policies. He said that some plans have re-instituted some restrictions such as needing a referral to see a specialist but that it isn't a major trend. Ginsburg also believes more plans may offer tiered hospital care benefits so patients who go to lower-cost institutions pay less. A similar concept is already used in prescription drugs benefit plans that charge less for a generic than a name brand drug.

Still, more employers are exploring what are called consumer driven plans to cut health care costs. In such plans, employees are provided with a certain amount of money to spend on their health needs. Once that money is used, employees must pay a deductible before a traditional insurance plan kicks in. The theory is that if employees have to spend more of their own money, they will be better consumers.

The findings are based on a regular survey of households throughout the country the Center has conducted regularly since 1997.

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