We’ve been tracking the data for more than five years now and the answer may surprise you. So, do qualifying high deductible health plans (HDHPs) save employers money? Contrary to popular opinion, the answer is basically, “no.”

Even though global consulting firms convinced many employers that HDHPs would generate savings by fostering better consumer behavior from plan members, that never happened (Those of us who’ve been in this field for a few decades remember when they were called “Consumer-Driven Health Plans”).

Depending on how HDHPs are priced and offered to eligible plan members, the claim experience of these participants may indeed be less. However, years of data have shown that this is due to favorable selection.

Plan members who select the HDHP option are, on average, higher paid, well educated, and less expensive from a claim perspective. Conversely, more expensive plan members are often of lower socio-economic status and usually select the lower-risk PPO plan option.

When you put it all together, our data (see below) has consistently shown little to no correlation between per employee per year plan costs and the percentage of HDHP enrollment.

Does this mean employers shouldn’t offer HDHPs? We’d again say, “no.” They are a valuable option in a choice environment. Many employees value the ability to accumulate money for the future in a health savings account even more than enjoying low deductibles and copays.

Attractive plan options/choices create value in and of themselves, even if they don’t reduce overall plan costs.