Ogden, Utah, January 25, 2012
By Scott H. Parkinson
Will a consumer-driven health plan really incent you to be healthier, or more conscientious about what you pay for health care?
It could. But with the ever-spiraling premiums of prepaid healthcare, that question might not matter going forward.
Consumer-driven health care plans have gained traction in recent years, with health savings accounts in the lead. In January 2011,
the number of people with HSA coverage hit 11.4 million—eleven times what it was in March 2005, according to America's Health
Insurance Plans (AHIP).
The HSA enrollee pool has grown at a rate of roughly 20 percent each year for the last several years. No doubt this year will see
another 20 percent climb. Or maybe more. A national Mercer report indicated that in five years, half of all employers will offer CDHPs,
and many of them will phase out traditional low deductible plans altogether.
Uses and abuses of the health care and insurance system aside, economic challenges have thinned employers' pocketbooks. Offering
traditional health care benefits is less feasible.
In Utah, a survey by the Employer Associations of America found that 23% of Utah companies plan to shift a larger percentage of healthcare
costs to employees in 2012. It's either that or ax other benefits like raises and paid time off, or for some companies, do another round
of layoffs, the surveyed companies said
The switch to consumer-managed health care hasn't been purely by employers' choice. In 2010, AHIP reports that 44 percent of employees in
small businesses who had a choice between HSA/HDHPs and other types of coverage chose the HSA option.
Tax incentives and employer contributions make the HSA attractive. Nearly 70 percent of companies that sponsor HSAs provide an annual
contribution, according to Kaiser Family Foundation.
The flexibility is also attractive. Unlike Cafeteria plans, the HSA is consumer-owned rather than employer-owned, and the money isn't
'use it or lose it'—it rolls forward every year. You can even use your HSA funds during a gap in health insurance coverage
(you just can't contribute to the account until your high deductible plan is back in place).
There are perks to be had at the doctor's office, too. Many health care providers offer a discount to cash-paying patients, because
it means they don't have to haggle with your insurance company. Some will also work with you on price or adjust the scope of service,
simply if you ask.
Whether you're an employer or a consumer, HSAs and HDHPs could be a viable way to pay for health care in the New Year. If you stay
healthy, you'll have a nice retirement supplement down the road.
In the meantime, you might have to give up the dental spa—or sharpen your negotiating skills.