Health care consumerism push comes with some challenges
The push to put more consumerism in health care has been accompanied by the growing popularity of high-deductible health care plans.
Known as HDHPs, the plans typically have out-of-pocket deductibles of at least $1,000 for individuals and $2,000 for families. Before any insurance kicks in and employees realize benefits, they are required to pay the deductible in full.
For many employers facing skyrocketing insurance costs, switching to these next-generation plans is the only way to continue offering health benefits to their employees.
For more information on the pros and cons of HDHPs, the Business Journal turned to Bill Hannah, principal with the national health care practice of KPMG. Hannah has 25 years of experience working with health care clients in Nashville and the Southeast.
It seems like high-deductible health care plans are really gaining traction. Why? They can be an attractive way to reduce or at least control the cost of providing health care benefits for employees.
That impact can happen in a direct and indirect fashion. It impacts costs and employees directly by shifting responsibility for spending on health care to employees.
There is also an indirect impact as employees become more cognizant of the cost of care and, potentially, more responsible for making good health care decisions.
If HDHP plays out as intended, there is potential for a win-win scenario that will combine cost control with an improvement of overall health.
Does it look like provider organization plans (PPOs) will eventually be replaced by high deductible health care plans? Not from what we are seeing. In fact, HDHPs compliment PPOs by shifting more of the control to employees.
To be sure, a large portion of health care cost will continue to be borne by the employer’s plan. But PPOs would remain an important piece of the whole with HDHPs.
What are the benefits of HDHPs? First, HDHPs shift more control of health care to employees.
Tags: business, health, health care, health care plan, health care plans, Information, insurance, providing health
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