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(HealthNewsDigest.com) – You can’t turn to any form of media today without hearing about the ‘healthcare crisis and the rising cost of health care’. In fact most health care costs have risen steadily and sometimes dramatically over the past two decades. But for consumer directed health care (CDH), this isn’t actually true. In fact, adjusted for inflation, many costs have dropped for those using and managing consumer directed, or high deductible, health care plans. In this article, I want to explain why Consumer Directed Healthcare is a cost-effective solution and why this growing segment of the health care market, used by over 37 million Americans today, needs to be protected as Healthcare Reform is considered in Washington (Consumer directed health care includes health reimbursement accounts (HRA) health savings accounts (HSA) Flexible Spending Accounts (FSA)).
Most everyone is in agreement that items like tort reform, handling of pre-existing conditions, making coverage available to more Americans and decreasing the rate at which healthcare costs are rising are important goals and need attention in our current health care system. What alarms me is that aspects of the health care reform proposals take part of the system that works well – CDH – and reduce or even destroy its effectiveness. Let’s make sure that while important healthcare reform work is being done, many parts of our system that DO work today aren’t destroyed in the process.
The cost to the employer and to the consumer of administrating claims in the CDH world is the same as it was fifteen years ago. Because of advances in technology, innovation and competition with providers and administrators of high deductible health plans the CDH costs have stayed constant. Perhaps even more important is that premiums on high deductible health care plans have been rising at a much slower rate than those of traditional health care plans. Why are costs for consumer directed health care so much more affordable? The answer is that when consumers make their own choices about their health care, and use their own money (as in high deductible plans) they make smarter and more informed decisions. And that saves us all money.
Studies and independent data provide significant proof of this point. In 2009, Cigna concluded a study comparing costs between participants in their Cigna Choice Fund, the CDHP alternative to their traditional plans and their traditional insurance plan. The hypothesis behind the study was that by enrolling in Cigna Choice, consumers would save money without compromising their care.
The results of the study, reported this March in Managed Care Magazine, were stunning. First year enrollee costs were 13% lower than those in the traditional plans. The cost of health care for those with chronic diseases were reduced nearly 20 percent in the CDHP and the use of generic drugs was much higher than those in traditional plans. In addition, the Cigna study showed an increase in first-year preventive care visits. Although I’m not sure I agree completely with President Obama that preventive care is the magic solution to lower health care costs, preventive care does contribute to better health in the long term – which obviously can lower an individual’s need for health care down the road.
So why would consumer directed health care be threatened by health care reform aimed at lower costs, helping to insure more Americans and making it easier to take advantage of Wellness programs? It’s a good question, Consumer Directed Healthcare helps 10-12 million Americans carry insurance who probably couldn’t afford it without the assistance of CDH, it helps 37million Americans manage and afford their ongoing care and treatments and it’s very cost effective. While the Administration and our legislators work to fund what is turning into one the most expensive pieces of legislation ever, they are pulling dollars from some places that do need reductions, but also looking at some areas like CDH that will directly hurt the solution and the Americans they are trying to provide for.
Let your legislatures now that you appreciate the healthcare assistance you get from your FSA, HSA’s and HRA today and that you don’t want a tax increase or removal these important benefits. FSA caps, excise taxes and cutting out covered expenses are ways your healthcare costs will increase with the current legislation. In its current state, the legislation would be a tax increase to the middle class and to seniors who take advantage of these plans.
Over 10 million Americans, including a large percentage of small businesses, can currently only afford insurance because of consumer directed health care. Recent studies by the National Association of Self-Employed (NASE) show that consumer directed health care plans are most effective for small businesses and self-employed as well – a growing population of workers that is rising due to unemployment.
We’ve seen millions of Americans enroll in a consumer directed health care plan over the past three years. They are experiencing lower healthcare costs, lower premiums and the technological advances like paperless claims processing, financial services capabilities like debit cards and other advantages that makes their lives easier. These consumers are proving that by given choice where health care is concerned, they make the smart decisions. And that’s good for all of us.
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