The Consumer Driven Health Plans discussed above all feature a tax-exempt account that an individual uses to pay for individual health care services. This gives consumers an incentive to consider cost at the time that they use health care services.
A different type of account helps consumers to select different types of providers to create a customized provider network and insurance coverage. Funding for health care through insurance coverage may be instead of (or supplemental to) using the account to pay for individual health services. An individual with such an account selects one of each type of provider to create a customized network and then pays the resulting customized premium. Each provider is paid a fixed amount per month to provide only the care that an individual needs from that provider. The sum of these fixed amounts is the customized insurance premium.
In the field of health insurance, a fixed amount paid to an organization (such as an HMO) to provide all types of care for an individual is called “capitation” payment. A fixed amount paid to one type of provider (such as a Pediatrician) to provide only the care need from that type of provider is called “sub-capitation” payment because it only covers a subset of needed services. With a Customized Sub-Capitation Plan (CSCP), an individual is given a choice among providers of each type and is shown the sub-capitation premiums that each provider charges. The customized premium that the individual pays is the sum of the sub-capitation rates for the providers the individual selects.
Possible advantages of CSCPs include: flexibility in selecting providers based on quality, prices, and personal preference; and relatively complete insurance coverage without the out-of-pocket coverage gap common among most Consumer Driven Health Plans. Possible disadvantages of CSCPs include: difficulties in coordination and accountability in referrals and other interactions among providers; and a higher premium than plans featuring accounts like MSAs or HRAs.
Some people might say that in order to be called Consumer Driven Health Care, a health plan must give consumers an incentive to contain costs at the time that health care services are used. With this definition, a CSCP might not be called a true Consumer Driven Health Plan. However, most people consider CSCPs to be a form of Consumer Driven Health Plan because: they give consumers strong, innovative incentives to contain premium cost at the time of insurance selection; and they provide internet support so that individuals can make choices based on provider quality and price.