According to a recent report released by the American Association of Preferred Provider Organization, enrollment in consumer-driven health plans grew 15 percent in 2013, up to 45 million from 39 million in 2012, which was the only plan type to grow last year. While these results are not all that surprising, employers continue to report lower than expected enrollment in consumer-driven health plans. So, where does the gap come in?
Consumer-driven health care combines a comprehensive high (or higher) deductible health plan with a tax-free health account, such as a health savings account, flexible spending account or health reimbursement account. It requires the consumer (employees) to understand first what the account is and second, how to use it.
If you are an employer implementing a consumer-driven health plan, consider these tips. If you are an employee being presented with the option, take the time to evaluate and really understand your options. You might be surprised.
Do the math.
Selecting benefits is often driven by emotional concerns rather than rational analysis. The word “high-deductible” invokes fear for many. The first step to understanding and accepting a consumer-driven health plan? Complete a side-by-side comparison of what each plan will cost. Be sure to include the additional 30-40% savings realized by paying eligible medical expenses with a tax-free health account.
Consider the annual cost differences.
Following a comparison, review the premium savings under a high deductible health plan on an annual basis. A cost difference of $50 per pay period (with 26 pay periods) may not seem significant, but the annualized savings of $1,300 really is significant – and those savings can be used to offset the increased exposure of the higher deductible.
Consider various scenarios.
After completing the basic math, it is important to take it to the next level. What will overall out-of-pocket expenses look like for someone with low medical expenses, someone with moderate expenses and someone that hits a plan maximum? Understanding the potential outcomes within a particular scenario can help to make the costs “real” and may assist with calming potential emotional concerns.
If there are employees who are already in a consumer-driven health plan, see if they will share their experience. Employees who have already made the transition to a consumer-driven health plan are often the best advocates and will typically share tips on what they learned along the way.
Education, education, education.
Education does not end with open enrollment. It is really just a beginning. Consumer-driven health plans are often misunderstood and require employees to get involved in understanding the costs of care and when alternatives might be available. What was once a $10 office visit co-pay may now be a $150 office visit charge. Try to be proactive. Your health plan will often provide resources for understanding cost and quality of services, along with other consumer tools. You might also check out some of these resource: Healthcare Bluebook, HospitalCompare.hhs.gov, The Leapfrog Group – Hospital Safety Score and NewChoiceHealth.com.
We are always looking for additional tips and success stories. We encourage you to share them here or email us.