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Health Plan Switching: Not by Choice

Cheryl A. Thompson

New research shows that most consumers change health plans as a result of a job change or an employer’s change in plan offerings and not direct personal choice.

The Community Tracking Study, which surveyed households across the country in 1996 and 1997, asked 37,545 nonelderly persons with private insurance whether they had recently switched health plans and why.

Of the 17 percent of respondents who said they had switched their health plan in the previous year, 36 percent explained that they switched because an employer changed its plan offerings, 32 percent because they changed jobs, and 16 percent because they could pay less for the new plan. Another 8 percent switched health plans to obtain better services, and the rest switched for miscellaneous reasons.

Consumers who changed from a health plan other than an HMO, such as a preferred provider organization or indemnity plan, to an HMO were less likely than other respondents to cite a job change or less expense as their reason. On the other hand, people who left an HMO to join a non-HMO were less likely than other respondents to attribute the switch to an employer’s change in plan offerings.

Compared with people who did not change health plans, plan switchers were at least twice as likely to have changed their usual source of care.

Although plan switching can lead to disruptions in care, which could be dangerous for certain segments of the population, people in fair or poor health and people ages 55 to 64 were less likely than others to change health plans.

The researchers acknowledged that a fine line exists between "voluntary" and "involuntary" plan switching. For example, employers can change their health plan offerings in order to improve the appeal of the total compensation package to prospective employees. People who changed jobs to obtain a better compensation package would not have been classified in the study as having switched health plans because of direct personal choice.

Results of the study are reported in the May/June issue of Health Affairs.