 |
 |
Is all the buzz about High Deductible Health Plans (HDHPs) justified? Without a doubt, this is a major development in health care benefits as our federal government has legitimized a tool that over time has the potential to become an integral component of employer provided health plans.
Health Savings Accounts (HSAs) were created by the Medicare Prescription Drug Improvement and Modernization Act of 2003. They are accounts into which individuals, family members and employers can make tax-deductible cash contributions, and the deposits can be withdrawn to cover qualified medical expenses. Unlike Flexible Spending Accounts (FSAs), any unused balances can rollover from year to year and are allowed to accumulate contributions and earnings. Only individuals covered by a qualified High Deductible Health Plan (HDHP) can establish an H.S.A.. To qualify as an HDHP, the plan must have at least a $1,000 individual and a $2,000 family annual deductible, and a maximum annual out-of-pocket expense limit of $5,000 for self-only and $10,000 for family coverage.
While HDHPs do inherently introduce economic accountability by way of higher deductibles and HSAs, they do not necessarily motivate employees to make better health care choices. In fact, there are those who argue that because employees are now paying more of the first-dollar cost of healthcare services, appropriate healthcare may be delayed or ignored and therefore cause cost to be even higher than would have been incurred with a traditional health plan.
We believe HDHPs are a step in the right direction, but they are not a panacea for all the employer’s health benefits woes. Organizations that write checks to pay for health care benefits desperately need solutions to the ever-escalating cost increases encountered year after year. Over the last decade the first wave of “managed care” brought employers some short-term relief primarily through discounted services by way of networks and provider groups. It is time that managed care move on to the next step which is finding ways to make the individual more accountable for the decisions he or she makes that ultimately impact that person’s health. We believe this can best be accomplished by encouraging employers to consider how to provide better health education, promote wellness, and create greater employee accountability within their health benefit plans.
|
|
