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High Deductible Health Plan (HDHP)

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High Deductible Health Plan

High Deductible Health Plan (HDHP)

What is the concept of High Deductible Health Plan?

High Deductible Health Plan is the plan other than traditional fee for services and managed care health plan. It offers high deductible (more than $900 per year). Premiums are comparatively lower in this plan than in lower deductible plans.

What is new about Consumer Driven Health Plan?

The first thing we should know about consumer driven health care (CDH) is it offers consumer with lower premium in exchange of low deductible. It gives decision making opportunity to the consumer to keep expenses low against health care with financial incentives. It offers two important things, firstly a personal account to meet the expenses beyond regular health care check up. An employer can fund for this account partly or as a whole that makes it Health Saving Account (HSA) or Health Reimbursement Account (HRA). Health Saving Account is totally controlled by an employee. This account bears portable balance year to year.

What are the merits of Consumer Driven Health Plan?

The combination of tax incentives with High Deductible Health Plans (HDHP) give maximum saving to its consumer. It offers low amount of premiums. In this plan, funding to HSA to cover health expenditures up to the deductible minimizes the out of pocket risk of the consumer. Consumer Driven Health plan is HDHP premiums in last few years have not been seen to increase as other conventional plans do.

What are the drawbacks of HDHP?

The involvement of Health Savings Account, Health Reimbursement Account and a highly deductible health plan confuses average consumers to a great degree. CDH plans adds burden over the consumer to search for the best mix of price and quality for a good check over health. CDH plans become an unnecessary health care spending to an average consumer. So, employers compensate this by offering higher salaries.

Is Consumer Driven Health Plan a money saver?

If we look in to the enrollment in HDFC qualified for Health Savings Account, we will see that it has tripled in last couple of years but the premiums are remaining the same instead of being getting double digit increment like other traditional PPO and HMO plans. It shows that CDH plans are money saver.

Is Consumer Driven Health Plan for all type of people?

Yes. All type of people can save under consumer driven health plan. Consumer who is unable to use medical services during the year can save the maximum amount of money with high deductible health plans. Individual who uses maximum medical services throughout the year should know about the benefits given in this plan and pay attention to the co insurance, maximum out of pocket and exclusions in the plan.

How consumer is in control in Consumer Driven Health Care?

In this Plan consumer has to pay the money for all medical expenses and they can even choose the services they want. This is not applicable with any other traditional plans. Purchasing of medical service like acupuncture is not covered under this plan but if you go for this you may be allowed for this under HSA but it will not be covered under deductible.

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