A consumer-directed health plan (CDHP) typically involves the combination of high-deductible health coverage with a health savings account (HSA) or health reimbursement arrangement (HRA). Those covered by CDHPs pay lower premiums for their health coverage because the deductibles are high. Using either an HSA or HRA, they set aside extra money that can be used to help satisfy the deductible. In theory, according to the California Healthcare Foundation, CDHPs will lead consumers "to eliminate unnecessary care and seek lower-cost, higher-quality providers."
The health coverage offered in the typical CDHP can be priced more reasonably because of the high annual deductibles built into the plan. While the cost of such coverage may be enticing to employees at the outset, they may be less pleased when it comes to satisfying these steep deductible amounts. CNNMoney.com reported in March 2009 that "the average general annual deductible for single coverage is $2,010 for HSA-qualified plans and $1,552 for HRAs."
HSAs and HRAs
HSAs are funded by enrollees themselves. The money in them can be rolled over for future use at year's end. No taxes are withheld from the funds contributed to a HSA, further enhancing their attractiveness as a way to pay for health expenses. According to the Plan for Your Health website, the money in an HRA "is contributed by your employer and doesn't count as income; saving you valuable tax dollars---complete with Uncle Sam's stamp of approval." Unused funds in an HRA accounts also can be rolled over for future use.
CDHPs Prove Popular
CDHPs have been offered by employers only since the early 2000s, but they have shown impressive growth. In an April 2006 report, the U.S. Government Accountability Office (GAO) said that the number of enrollees and dependents covered by a CDHP had nearly doubled from January 2005 to January 2006, rising from 3 million to between 5 and 6 million.
Most CDHPs offer an array of tools to help consumers make intelligent health care decisions. According to GAO, the tools typically include online access to member accounts for checking progress toward satisfying deductible and balance in HSA; hospital-specific and physician-specific quality data; provider cost information; and health education information, including general preventive care, common medical procedures and conditions and a health risk assessment tool.
CDHPs put much of the health care decision-making in the hands of the consumer, which on the face of it would seem to be a good thing. However, based on a July 2008 report in the Portland Business Journal, that very ability to direct one's own health care has some built-in flaws. The journal cited two studies done by Oregon researchers that showed evidence that those covered by these plans were making economic decisions that might ultimately prove perilous to their health. One of the two studies, conducted by University of Oregon policy experts, found that "people enrolled in these plans were more likely to quit taking drugs that control high blood pressure and cholesterol-lowering medications than participants with more robust medical coverage."