CHEAP HEALTH means Low Cost - NOT low quality

Consumer Driven Health Care

What is Consumer Driven Health Care?

Here's Consumer Driven Health Care in a nut shell: In a word, consumer driven health plans give more control and flexibility to people to manage their own health care expenses, and this gives them the increased savings incentives to stay healthy and use health care wisely.

                   

Most employers and self employed persons interested in CDHC are being advised to take a three pronged approach that involves the following:

  1. A catastrophic / high deductible (CHD) Health Insurance Policy to cover (as the name implies) catastrophies (read here, heart attack, stroke, cancer, emergency major surgery, HIV, etc.)
  2. Some form of a Health Savings Account (HSA) or Health Care Reimbursement Account (HCRA)
  3. A discount benefit plan to cover day-to-day health and medical expenses

Now, some explanations:

  1. Catastrophic / High Deductible Health Insurance Policies- These policies can be obtained from most health insurance carriers. They typically carry a very high deductible, a limited out-or-pocket maximum (OPM), and a 70/30 or 80/20 payment split after the OPM. An example would be a BC/BS $2500 deductible policy, that carries a $15,000 OPM, and a 70/30 split after the OPM and deductible is met. This type policy costs about $250 per month. Check with local carriers in your area to obtain the specific information you need, but the policy cited is pretty common. CHD's with $5,000 or $10,000 deductibles can be found, and the premiums for these type policies decreases as the deductible amount increases. Keep in mind that your deductible MUST BE MET before you enjoy the payment split with your insurance carrier.                                     
  2. Health Savings Accounts - Suffice it to say that the Health Savings Accounts available now beat the old Health Care Reimbursement or "cafeteria" plans to pieces. With the old models you could have pre-tax dollars placed in a third party administrator's (TPA) trust account, and use it to pay, or be reimbursed for, any of the deductibles and other medical and medical related expenses. The really tough part came at the end of the "Benefit Period" when everything that was left in that account that was unused, was lost to the TPA ( hence the phrase "use it, or lose it!" ). Then your "cafeteria" account started up again ... from 0. The trick became how to balance out the amount you put in, so you could be sure to get it out by the end of the year. With the new HSA's you can put in, on a yearly basis, up to the amount of your deductible on your CHD policy. In our example, that would mean you could have $2500 pre-tax dollars put into your HSA (and keep that amount in the account by reimbursing yourself for any medical expenses paid for out of the account ... in other words, you can KEEP contributing up to $2500 [again, our example] in the account per year). Here is where the new accounts beat the old ones, hands down. At the end of the year, your HSA rolls over ... plain and simple. In other words, you DON'T lose it. You continue to pay into your HSA the next year, and the next year, etcetera, AND, if you have money in there at age 65, you can get it out, for OTHER THAN MEDICAL PURPOSES. In short, you're building equity in your own health. This is a good thing. So a HSA is basically a medical savings account where savings accrue to off-set medical expenditures. Unlike Medical Savings Accounts (prior to 2004), HSA's offer: no restriction on the size of the employer than can offer them; no restriction on mixed contributions by both employer and employee; a higher maximum annual tax-deductible contribution (100% of the deductible for the high-deductible health plan); and lower minimums ($1,000 for an individual and $2,000 for family coverage) for the deductible for the high-deductible insurance policy. Money can be withdrawn from an HSA for purposes other than medical expenses after payment of income tax plus a 15% penalty. HSAs are portable when an employee changes employers.
  3. Discount Health Plans - Health care companies offering CDHC plans are creating online markets where the users manage their own health care expenses; get information on provider quality; and pool their clout to get information and discounts on provider prices. These discount companies generally do administrative services (such as coordinating employee choice and tracking expenses) instead of assuming risk (receiving a fixed premium like an insurance company). Generally, the high-deductible insurance policy is offered by another company. These plans are available from several source Discount Medical Plan Organizations, or DMPO's. The plans offer access to provider networks that charge a reduced fee for service.

For more information on the type of discounts available through AmeriPlan™,

click on either of the blue links below.

                            

Show me a short video on AmeriPlan's™ CDHC offering

                         

Take me to the Health Plan website

Cheap Health - MORE than what you paid for!!