Top 20 states by HMO enrollment

OVER RECENT YEARS, there has been a slight decline in HMO enrollment, according to industry experts.

"For example, in 2004, our clients had around 20% HMO enrollment," explains Shawn Jenkins, CEO of Benefitfocus, provider of CDHC software and services. "That number has decreased by 1% to 1.5% each year, which is consistent with overall trends. This decline is indicative of the latest trends as consumers are demanding more control over their healthcare options."

To retain even their current market share, HMOs have had to relax most of the cost-control tools they once used, such as referrals from primary care physicians, Gebhardt says.

"Most data show that HMOs have not controlled costs as well as PPOs in recent years," he says. "What have they replaced this model with? Are they using the PCP relationships of their members to more effectively manage health and utilization? As the care management and health programs employed by other plan types hold claims trends in check, any remaining market advantage still held by HMOs could erode, leading to further decline in enrollment."

The challenge for employers and carriers is to determine how to inform them, Jenkins explains. "The same HMO framework is revived within the new consumer-driven health plans, such as high-deductible health plans and health savings accounts," he says. "The difference will be that consumers are in the driver seat. Therefore, brokers and carriers are facing enrollment challenges as they try to reach consumers in informative ways that educate them about plan options, financial decisions and healthcare information."

-Tracey Walker

Commentary is independent of source data