We have discussed the details of different types of accounts that form the core of most Consumer Driven Health Plans. We now take a step back to discuss at their overall structure and common features. This is a prelude to discussing their pros and cons.
Three Tiers of Payment
Most Consumer Driven Health Plans have three tiers of payment as follows. The first tier is usually a tax-exempt account to pay health care expenses, like one of the accounts described above. Generally it provides more flexibility than managed care plans concerning which providers can be seen and what types of services are covered.
The second tier of payment is out-of-pocket payment for health care expenses after money in the account is used up and before the deductible for the high-deductible insurance is reached. Since this is a “hole” in coverage compared to traditional complete health insurance, this tier is sometimes called a “doughnut hole” or “coverage gap.”
The third tier happens if allowable health care expenses for the year go above the “deductible” of an accompanying high-deductible insurance policy. Health Savings Security Accounts (HSSAs) are the one form of Consumer Driven Health Plans that need not have such a policy. This insurance generally pays a high percentage (or all) of health care expenses over the deductible. However, sometimes this insurance has restrictions like those in managed care plans.
Amount Contributed to the Account
The amount contributed to the health account by an employer may be: the amount $X that they would otherwise have spent on a premium for full insurance (and the employee must pay for the high-deductible policy out of this account); $X minus the premium of the high-deductible insurance (and the employer pays for the high-deductible policy separately from the account); or less than $X if the company is seeking to save money compared to the premium for full insurance.
Internet-Based Support for the Consumer
In addition to the three tiered structure outlined above, Consumer Driven Health Plans generally provide internet-based support so that individuals can: track and manage their health care bills; manage and improve their health with useful information and preventative services; get information about provider quality; and get group-rate prices from providers. As more providers upgrade to Electronic Medical Records (EMR), the level of internet-based support for consumer decision making with respect to health care coverage and health management will increase dramatically.