Consumer Driven Health Plans

Here is one fact we can all agree on: health care costs are out of control and the problem is getting worse every year. Here is one thing we probably don’t agree on: the best way to fix the problem. Well, consumer driven health plans may not be the solution for our current health care problems, but it’s a start.

First, let’s begin with a general understanding of what a consumer driven health plan looks like. In essence, a plan of this nature will include a prefunded account from which the employee pays for routine medical expenses and a high-deductible insurance plan to cover catastrophic medical expenses. Many businesses today are beginning to turn to consumer driven health plans for two main reasons: to curb rising health care costs and to reward employees for making healthy lifestyle changes.

In doing so, they are also shifting the bulk of the responsibility for health care to their employees (the consumer). Under a consumer driven health plan, the consumer is given the task of making choices as to where their health care money is spent. The premise here is that with greater accountability, consumers will put more thought into the volume and variety of health care services that they use, while also paying greater attention to cost.

The benefit is that with more consumer discretion and cost scrutinization, the health care market will become more competitive. As the health care market becomes more competitive, consumers will begin to see more reasonable prices on health care services. The key here is that employees must become knowledgeable consumers. They must understand how they can best use their allocated funds to fulfill their health care needs.

This is where it becomes the responsibility of employers, benefits administrators, and any benefits brokers or agents that are involved to effectively educate and support employees; before, during, and after the consumer driven health plan is implemented.

One final element that can have a dramatic effect on the long-term success of a consumer driven health plan is an Employee Health and Wellness Program. This type of program is a great benefit for employees for two reasons: (1) employees are educated, encouraged and coached to make healthy lifestyle changes and (2) greater health leads to less money spent on health care costs.

Consumer driven health plans are a win-win for both employers and employees. Employers are able to shift responsibility for health care to the employees, in turn saving money. Employees are given the chance to regain control over their health and make better decisions regarding their health care in the future. While it may not be the solution to our current health care crisis, consumer driven health plans are beginning to look like a welcome alternative to the status quo.