Consumer Driven Health Plans Slow to Catch on

The healthcare industry, and especially health insurance companies seem to love acronyms; and two you are likely to hear or read a lot more about in the coming years are CDHP and HSA – for Consumer Driven Health Plans and Health Savings Accounts. They are the vanguard of the new movement of consumerism in healthcare. Which after years of insurance companies in command of most decisions regarding healthcare, seeks to return more control to consumers. The idea is that as they have in other areas of the economy consumers themselves can do much to help to control and bring down the costs of healthcare. It is a rather ambitious goal, and yet “we the people” are the only ones in the equation that have yet to have been given a shot at reducing health insurance and healthcare costs, while the insurance companies, healthcare providers, and the government certainly have not done such a great job.

In many parts of the country insurance companies have embraced the idea of Consumer Driven Health Plans. While it is debatable if their motives are truly to empower consumers or just to shift more of the cost of healthcare to them, many of these programs do have merit. The problem is consumers and businesses alike, have been very slow to participate. And this according to experts in the filed is primarily due to a lack of understanding of how they work. The cornerstone of the consumerism model in health insurance is the HSA coupled with another acronym – the HDHP, High Deductible Health Plan. Basically the idea is to set aside funds in pre-tax dollars to pay for out of pocket medical expenses, until you reach a high deductible usually at least 1500.00 to 2000.00 dollars, when the health benefits of the plan kick in. This makes for more affordable health coverage as the premiums attached to the HDHP’s are significantly lower then other policies offering similar benefits. But consumers have not embraced the idea. And those that do, mainly do so primarily for the obvious advantage of the lower premium, and fail to see the other aspect of the concept, the HSA as a Tax Free annuity.

Experts and industry watchdogs agree that it can be complicated, and it falls on the insurance companies themselves to help educate consumers on the advantages and benefits of Consumer Driven Health Plans. And many of them are heeding the call. For example Humana now counts among its customer service staff a telephone robot named Eliza that calls members to tell them about money saving initiatives like low-cost drug alternatives. According to Beth Bierbower, Humana's vice president of product innovation, Eliza has saved members over $11 million over the last 18 months. Similarly, United Healthcare has initiated a program that tracks the type of care it sees its members are using most often, and provide information accordingly. So for example on monthly statements members with diabetes are reminded to go for annual foot and eye exams.

Putting consumers in the driver seat to make more of their own decisions regarding health insurance and healthcare costs may very well prove to be a great idea down the road. However, getting there safely and efficiently as with any new driver will require some proper training, and that will only come with concerted efforts by the insurance companies, and state and federal officials.