Consumer Driven Health Plans Gaining Support as Affordable Medical Coverage
[10/03/07]
The move is on to give consumers more power in their health insurance and healthcare spending decisions. So-called Consumer Driven Healthplans are gaining in popularity, with insurance companies, employers and finally consumers themselves.
Consumer driven healthplans, alternatively called defined contribution health insurance plans are often a very low-cost health insurance option. The cost of premiums under such affordable health insurance plans are kept low by having a high deductible, sometimes as high as $10,000.00. To offset the high deductible, the consumer driven health insurance plan is coupled with a health saving account, that allows individuals to pay for out of pocket health expenses until the deductible amount is reached in pre–tax dollars.
The Health Savings Account, or HSA that funds the plan is similar to an earlier health insurance saving concept where your employer offered the added on option to your employer based health benefits of a Flexible Saving Account. Contributions into the HSA are made by your employer, or by having a pre-determined amount deducted from your paycheck every week. If you are relatively healthy and outlay a minimal amount for healthcare costs every year, say only for routine check-ups and the occasional cold or flu, you will likely have more than enough accumulated in the fund to cover these expenses. If however you have a chronic condition or illness that requires extensive doctors visits, the HSA will soon be exhausted and you may have to pay with other means until the deductible amount is met and your full health insurance benefit kicks in.
Employers and health insurance companies like these Consumer Driven High Deductible Healthplans. When consumers are forced to pay a greater share for their own healthcare, they are more likely to take better care of themselves. And that is a “health benefit” for everyone concerned. The employer is happy because healthier employees are more productive employees. Insurance companies of course are happy when people are healthy and submit fewer claims, and ultimately healthy consumers save money on healthcare costs and are - healthier. Employees who have participated in the affordable health insurance plans also say they like the added freedom these plans have over more traditional HMO or PPO health plans. And some companies that offer the plans allow any unused funds in the HSA to roll over into the next year –so the healthy consumer gets the added advantage of a growing tax deferred annuity.
Consumer driven healthplans, alternatively called defined contribution health insurance plans are often a very low-cost health insurance option. The cost of premiums under such affordable health insurance plans are kept low by having a high deductible, sometimes as high as $10,000.00. To offset the high deductible, the consumer driven health insurance plan is coupled with a health saving account, that allows individuals to pay for out of pocket health expenses until the deductible amount is reached in pre–tax dollars.
The Health Savings Account, or HSA that funds the plan is similar to an earlier health insurance saving concept where your employer offered the added on option to your employer based health benefits of a Flexible Saving Account. Contributions into the HSA are made by your employer, or by having a pre-determined amount deducted from your paycheck every week. If you are relatively healthy and outlay a minimal amount for healthcare costs every year, say only for routine check-ups and the occasional cold or flu, you will likely have more than enough accumulated in the fund to cover these expenses. If however you have a chronic condition or illness that requires extensive doctors visits, the HSA will soon be exhausted and you may have to pay with other means until the deductible amount is met and your full health insurance benefit kicks in.
Employers and health insurance companies like these Consumer Driven High Deductible Healthplans. When consumers are forced to pay a greater share for their own healthcare, they are more likely to take better care of themselves. And that is a “health benefit” for everyone concerned. The employer is happy because healthier employees are more productive employees. Insurance companies of course are happy when people are healthy and submit fewer claims, and ultimately healthy consumers save money on healthcare costs and are - healthier. Employees who have participated in the affordable health insurance plans also say they like the added freedom these plans have over more traditional HMO or PPO health plans. And some companies that offer the plans allow any unused funds in the HSA to roll over into the next year –so the healthy consumer gets the added advantage of a growing tax deferred annuity.
Individual or
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