Are CDHPs Reducing Medical Costs Without Cutting Care?

It’s safe to say that the jury is still if not out, at least somewhere between curious and skeptical about the overall benefits of consumer directed health plans. 

But studies are beginning to come in that suggest there may be real reductions in costs to the system from consumer directed plans.  

Earlier this year, a multi-year study that compared the healthcare claims experience of nearly 440,000 members covered by CIGNA CDHPs and traditional HMOs and PPOs was released. 

The study found that CIGNA Choice Fund account-based consumer-driven health plans (CDHPs) reduced medical cost trend by 13 percent relative to HMO and PPO plans, even as individuals enrolled in CDHPs use more preventive services and comply with their medical treatments.  

“In these tough economic times, it’s critical that we all do what we can to cut medical costs without cutting care,” said CIGNA Chief Medical Officer Dr. Jeffery Kang. “Critics of consumer-driven health plans contend that people will sacrifice their health to save money; when in fact our data show that account-based plans save money even as individuals receive the same or higher levels of care than those in traditional health plans.”  

According to Dr. Kang: “In our latest study of medical claims for 440,000 people covered by CIGNA plans, we reviewed claims for 22,000 individuals who have either hypertension or diabetes and found that medical cost trend was substantially less for those with CDHPs, while their treatment regimens were the same or better than those in traditional HMOs and PPOs.”  

Key findings of the 2009 CIGNA Choice Fund Experience Study include:  

Chronic Conditions: Medical cost trend was substantially less for CIGNA Choice Fund customers with diabetes (20 percent less) or hypertension (18 percent less) than for individuals with either of those diseases in traditional CIGNA health plans. Notably, these individuals maintained similar treatment regimens regardless of whether they were covered by CDHP, HMO or PPO plans; suggesting that the lower cost trend are likely a result of better chronic disease management, rather than patients foregoing recommended care.  

Pharmacy: In the first year, pharmacy cost trend for those covered by CIGNA Choice Fund plans was 10 percent lower than traditional plan cost trend, with the use of generic medications being nearly 5 percent higher among individuals covered by CIGNA CDHPs.  

Overall Medical Trend: In the first year, normalized medical trend for CIGNA Choice Fund plans was -3.3 percent versus 10.6 percent for traditional plans. The study also shows lower medical trend for CDHP continues in subsequent years. People with CIGNA Choice Fund continued to receive recommended care at compliance rates that were similar or better than those covered by traditional CIGNA health plans.  

“Not only does the data show that consumer- driven individuals becoming smarter about their care, individuals enrolled in CIGNA Choice Fund continued to receive recommended care at the same or higher levels as those enrolled in traditional plans in an evaluation of compliance with more than 300 evidence-based measures of healthcare quality. Preventive care visits for CIGNA Choice Fund individuals were 8 percent greater when compared to traditional plans and preventive care visits for renewal year CIGNA Choice Fund were 15 percent greater when compared to traditional plans.  

Pharmacy cost trend for those newly enrolled in CIGNA Choice Funds was 10 percent lower than those enrolled in traditional plans. When compared to the prior year, usage was higher for new CIGNA Choice Fund individuals and average unit trend cost was lower, for maintenance medications, suggesting that these individuals were compliant with their medications while exercising lower-cost options such as purchasing their medications by mail order and electing to use generic medications.  

Study results suggest that people with CIGNA plans are becoming more engaged in their healthcare, with increasing numbers of individuals turning to online information and decision support tools offered via  

Currently an average of 55,000 individuals visit each business day to get the most out of their healthcare benefits. Online capabilities include CIGNA Care Connections, a personalized online search engine that helps those with CIGNA health plans find the highest quality and cost efficient physicians and hospitals, conduct side-by-side cost comparisons for generic, brand name and available therapeutic alternative medications at more than 57,000 pharmacies nationwide and locate the cost effective medical facilities, including convenience care clinics.

Address: CIGNA, One Liberty Pl., 1650 Market St., Philadelphia, PA 19192;    (215) 761-1000   (215) 761-1000 ,

















Denying Coverage To Those With Pre-Existing Conditions Subject Of New Federal Report

Just in time to add fuel to the health insurance reform debate, the federal Department of Health and Human Services (HHS) has shone a spotlight on the industry’s practices of denying coverage to individuals with pre-existing conditions.

The report, “Coverage Denied: How the Current Health Insurance System Leaves Millions Behind,”scrutinizes health insurance company practices of denying coverage to or discriminating against Americans who have pre-existing medical conditions.

HHS noted that a recent national survey found that 12.6 million non-elderly adults – 36 percent of those who tried to buy insurance on the private market – were discriminated against in the past three years because an insurance company deemed them ineligible for coverage because of a pre-existing condition, charged them a higher premium, or refused to cover their condition.

“Another survey found 1 in 10 people with cancer said they could not get health coverage, and 6 percent said they lost their coverage because of their diagnosis,” HHS said.

The insurance company practice of denying coverage because of pre-existing conditions is not confined to serious diseases, the report noted. “Even minor problems such as hay fever could trigger prohibitive responses.”

“In 45 states insurance companies can discriminate against people based on their pre-existing conditions when they try to purchase health insurance directly from insurance companies in the individual insurance market. Insurers can deny them coverage, charge higher premiums, and/or refuse to cover that particular medical condition,” said the report.

An insurer could charge high premiums, deny coverage, or set a restriction such as denying any respiratory disease coverage to a person with hay fever, according to the report.

Some insurance companies respond to an expensive condition such as cancer by initiating a thorough review of the patient’s health insurance application. If the company discovers that any medical condition, regardless of how minor, was not reported on the application, it could revoke coverage retroactively for the patient and possibly all members of the patient’s family, the report said. The practice is known as rescission.

Companies can do this even if the condition found is not related to the expensive condition or if the person wasn’t aware of the condition at the time, the report charged.

“At least one company encouraged employees to revoke sick people’s health coverage through rescissions,” the report said.

“When a person is diagnosed with an expensive condition such as cancer, some insurance companies review his/her initial health status questionnaire. In most states’ individual insurance market, insurance companies can retroactively cancel the entire policy if any condition was missed – even if the medical condition is unrelated, and even if the person was not aware of the condition at the time,” the report said. “Coverage can also be revoked for all members of a family, even if only one family member failed to disclose a medical condition.”

Under terms of the proposed health insurance reform currently being debated in Washington, insurance companies would be prohibited from refusing coverage based on someone’s medical history or health risk. “Companies also would be barred from watering down coverage or refusing renewal because someone becomes sick,” the report noted. Companies would have to renew any policy as long as the policyholder pays the premium in full.

The report is available at