For CEOs Thinking about Consumer Driven Health Intends to Reduce Cost, A “Well Better” Permanent Solution

Consumer Driven Group Health Plans (CDHPs): Why and how They Miss the prospective

by Michael Chapman

The increasing cost of group medical health insurance is a huge problem for most small companies companies (companies with 500 or less employees. Companies of the size represent 95% of companies in america.) The percent of small companies offering group medical health insurance plans has fallen continuously. Today 1 / 2 of small companies offer group medical health insurance arrange for their workers, lower from 70% about ten years ago.

The only real efficient way that the company can help to eliminate the price of group health care insurance is that if their workers have less health care insurance claims. This may lead to a decrease in the general rise in the price of group medical health insurance for the organization the year after, when the organization signs an agreement at new rates for the following year. While there might not be an expense reduction, less claims should mean a lesser than usual premium increase.

“Consumer driven group health plans” are plans that spread more cost towards the employees by means of greater deductibles and greater or no prescription or physician visit co-pays, and “incentives” to reward employees for reducing their health care insurance claims. These incentives include financial and tax incentives authorized by the IRS that reward the worker for controlling the price of their medical claims.

The concept is when a lot of healthcare pricing is now use the worker, and when the worker makes less medical claims, they’re rewarded with tax-favored savings. The thinking is when the worker is really a “good consumer,” they’ll find methods to keep much more of their tax-favored savings that they’ll use within long term instead of apply it healthcare.

Consumer driven group health plans couple a higher deductible health plan with a number of the next kinds of IRS approved programs: Health Savings Accounts (HSAs), Health Reimbursement Plans (HRAs), and Medical Expense Reimbursement Plans (MERPS).

Firms that select consumer driven group health plans (CDHPs) generally visit a significant, but moderate and frequently temporary, decrease in the inflationary increases in group health care insurance expenses. However, we currently think that CDHP advocates are earning the incorrect argument, and therefore are missing the purpose.

While CDHP advocates may be winning a lesser rate increase for any year, they’re losing world war 2 on affordable healthcare and medical health insurance, and therefore are only motivating the advocates of universal healthcare and nationalized medical health insurance to operate harder to have their candidates elected in 2008.

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