Sent: Tuesday, September 26, 2006 10:32 AM

EXCLUSIVE August 7, 2006 Consumer Driven Market Report

Third Major Study Finds CDH Premiums Lowest

A new AHIP study of small group health insurance finds that the average HSA premium is lower than any other option on the market, including all existing products. This is the third study this year to conclude that U.S. employers will pay less for employee benefits if they use HSAs and HRAs.

A new Kaiser Family Foundation employer survey will be released Thursday, and is expected to show the same thing.

The AHIP study may be the biggest small group study ever conducted. It shows that employer premiums can be ranked from PPOs (the highest average premium at $310/$812 for single/family) to HSAs ($264/$692). In between are HMOs ($289/$756).

A study one year ago by Kaiser Family Foundation/HRET also found HSA/HRA premiums the lowest in the market, even including the average employer contribution. A second study by Buck Consultants showed the same, and a Deloitte survey just last month show HSA/HRA premiums increasing at the slowest rate of increase of all products on the market.

Comment: Employers always drive the adoption rate of new products. Their support of CDH is primarily a factor of premium levels, and in the past two years this has become the dominant factor. Bottom line: all of the other advantages of CDH are being driven by lower average premiums, which it is now the primary reason why CDH is growing.