Consumer Driven Health Care - Essay Example

Consumer Driven Health Care Abstract Health insurance enables individuals to receive health care services that they otherwise could not have afforded. However, there is a down side to this in terms of the high deductable factor of insurance policies. An insurance company pays the medical expenses of an employee while the employer pays for the insurance premium which means that the employee’s wage is also reduced. Consumer driven health plans (CDHC) is an insurance plan that allows employees or individuals to use their own health savings accounts or health reimbursement arrangements to pay directly for health care medical expenses, while still their highly deductable health insurance pays for high medical expenses that they could incur (Collins et. al., 2005, pp.8-23). This gives individuals the opportunity to make decisions on the health care service they receive based on what they can pay for. There is a choice of selecting a less expensive quality health service. (Beeuwkes et al., 2006, pp.516–530). More individuals are enrolling into consumer driven health plan because it lacks the high deductable factor of other insurance plans and also the consumer has a choice in the health care service to be provided, at a cost effective price. Table of Contents Abstract 1 Table of Contents 2 1.0Introduction 3 2.0Goal of Consumer Driven Health Care 3 3.0Disadvantage of Consumer Driven Health Care 4 4.0National Health Care Plan Impact on CDHC 4 5.0Conclusion 5 List of References 6 1.0 Introduction Consumer Driven Health Care (CDHC) is a three-tier health insurance plan that allows individuals to use their health savings accounts, out-of-pocket payments or health reimbursement arrangements (HRAs), to pay for health care expenses (Collin et. al., 2005). CDHC allows members to pay for health care services in this way while still their health insurance policy pays for more expensive medical expenses. Health Insurance is highly deductable and costs less when used to pay for health care expenses but for routine health care expenses, an individual pays directly for the expenses through a pre funded account provided by a bank or an insurance plan. 2.0 Goal of Consumer Driven Health Care Consumer driven health care gives an individual the opportunity to pay for routine medical expenses using consumer controlled account instead of the highly deductable fixed health insurance. This is an advantage to the patients because it allows them to have a greater control on their health care budgets. In this consumer driven health care plan, individuals have a role in decision making regarding the care they receive. Patients are able to ask about the cost of a treatment and choose a treatment option that is less expensive. This consumer directed health plan also advices employees on cost and selection of quality services, which enables employees to make informed decisions on their health care (Rowe, et. al., 2008, pp.12-19). Through the national health care plan, low income earners can also enjoy the benefits of having the consumer driven health care plan because they will be able to afford the health care services. Health care providers respond to the high consumer enrollment to the health plan by further providing quality services at cost effective prices. 3.0 Disadvantage of Consumer Driven Health Care Employees that are enrolled into the consumer driven health care plan tend to pay more for health care services because of the out of pocket payment, compared to those enrolled in traditional payment plans (Collins et. al., 2005, pp.8-23). Low income employees are highly negatively affected by this health care payment plan than high income earners. This is because these employees face the risk of high out of pocket payments and most opt not to receive treatment because of the high expenses. This leads to more ill workers that and has a long-term consequence both to the worker and the employer. Delaying or skipping treatment due to high health care costs affects negatively on an individual’s heath and also decreasing the productivity of the worker at the workplace. 4.0 National Health Care Plan Impact on CDHC Health reimbursement arrangements (HRAs) are meant to make health care for individuals more affordable and also accessible (Downey, 2004, pp.4-17). The National Health care plan adopted by congress is designed to increase the popularity of the plans, by expanding medical savings accounts and creating tax incentives that allow account holders to withdraw money tax free for paying medical expenses. To qualify for this, the consumer also has to have a high-deductable insurance plan. The provision of health savings account along with tax breaks and an insurance premium that covers low income earners has greatly increased the popularity of the plan. More individuals are enrolling for the consumer driven health care plan. 5.0 Conclusion Consumer driven health care plan is different from the traditional health care plan because there is no high deductable factor. It has the advantage of giving the consumer the decision making role of paying for a health care service that he/she can afford. The plan also educates the consumer on cost and quality services so that an individual does not only have a choice of which service to pay for, but to make informed decisions on the quality service that will be selected. Consumer driven health care plan has shifted the health care expenses from employers to employees (Moore, 2009, p.6). More employers are offering the plan and it has been noted that more employees are enrolling to the plan. List of References Beeuwkes, Buntin, M, Damberg, C, Haviland, A, Kapur, K, Lurie N, McDevitt, R, & Marquis MS, 2006, “Consumer-Directed Health Care: Early Evidence About Effects on Cost and Quality,” Health Affairs. Vol. 25, No. 6, pp. 516–530 Collins, Sara & Fronstin, Paul, 2005, Early Experience with High Deductible and Consumer-Driven Health Plans: Findings From the EBRI/ Commonwealth Fund Consumerism in Health Care Survey. Employee Benefit Research Institute (EBRI). Issue Brief. No. 288.pp.8-23 Downey, R, 2004, “The Changing Model of Consumer-Directed Health Care: HRAs [health reimbursement arrangements] and HSAs [health savings accounts],” Aetna presentation, Washington, D.C.pp.4-17 Moore, Rebecca, 2009, Cutting Corners: Employers turn to cost-sharing over cutting health benefits. Plan Sponsor.p.6 Rowe, John, W., Tina, Brown-Stevenson, Roberta, L. Downey, & Joseph, P. Newhouse, 2008, "The Effect of Consumer-Directed Health Plans on the Use of Preventive and Chronic Illness Services," Health Affairs, Volume 27, Number 1,.pp.12-19 Read More