Healthcare Trends – Consumer Driven Health Plans

Brian Leong Employee Benefits Consultant

Consider this: Consumer health plans are not designed to require a patient to shop around during an emergency. Rather, they empower patients to know their marketplace beforehand, so that in an emergency the patient knows where he or she feels most comfortable receiving care. Further, the freedom created within the consumer-driven model means that during an emergency a patient can act on personal choice or go to the medical facility that makes the most geographic sense, rather than being forced to seek treatment within a specified network as with many traditional insurance plans.

The consumer-driven model is all about educating the patient, not keeping him or her in the dark. An educated patient can better understand health care and health costs and then take the reins, making decisions that ultimately have a positive effect on both the system and the patient. Reports from insurance companies’ first-year HSA offerings prove that these models do work and are successful in driving down health care costs.

Was there ever a time when a consumer could afford to get sick? The cost of illness has never been of more concern than it is today with 47 million Americans having no insurance and health care costs spiraling upward with several years of double-digit growth. This is precisely the reason some would argue that the system needs the new consumer-driven model where it is possible to save on the front end and over the long haul.

Both a traditional plan and a consumer-driven health plan (CDHP) require some out-of-pocket expenses, but a high deductible health plan (HDHP) with an HSA has proven about 43 percent savings each year compared to a traditional plan based on premiums alone. That leaves substantial pre-tax dollars that can be put away for a health situation in the future.

Studies show that HSAs do not negatively affect people’s health; being afraid to go to the doctor for financial reasons is what causes harm. Some would argue that the thousands of uninsured people who go without medical treatment because they can’t afford it are a result of the traditional health care system which has prioritized up-front, high-dollar premium payments over actual medical treatment. And, even among the insured, there are many who elect to brush off doctors’ orders because the treatment is not covered by insurance, or the copay is too expensive. Studies show that HSA participants are no more likely to abstain from care than any other patient, and are more likely to look into preventative and wellness care and think through the relative cost of treatment options.

HSAs allow patients to save money on premiums, set aside pre-tax money to pay for out-of-pocket expenses, and pay with cash when the time comes. That means savings on the front end, tax savings throughout the year and the negotiating power of cash at the point of service. Consumer-driven health care creates choices for every transaction, and can be a cost-efficient alternative to traditional health plans. 

If you’re interested in evaluating your current health plan, don’t hesitate to contact Brian Leong, Employee Benefits Consultant, at 971-327-5785 or brianl@mgbenefits.com.  

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