Consumerism or Euphemism for Trouble Ahead?
Dissecting the Shady Nature of Consumer-directed Health Plans
Everyone from employers and employees to policy makers and the President of the United States is talking about health care these days. It’s an issue that garnered as much attention as the downturn of the economy. At some point during most public discussions related to health care, the term “consumer-directed” is nearly guaranteed to fall off the lips of one expert or another.
Consumer-directed Health Plans Defined
So what is consumer-directed health care? It is medical insurance provided to an individual or family by which the consumer is encouraged to be more discriminating about the costs of everything related to health—their treatment, prescriptions, and even the cost of annual physicals. Few experts argue that consumers can make a successful transition from one insurance type to another using supplemental programs like tax-advantaged health savings accounts (HSAs) or Health Reimbursement Accounts (HRAs) in conjunction with the health care plan.
The why is simply this: lower costs for both the employer and the insurance company. Consumers, on average, will be forced to choose the least expensive care as opposed to the best treatment because the burden of most of the expense is theirs. The critics of this health care plan claim that insurance companies are also trying to find a way to place more of the burden of saying “no” on the shoulders of the consumers. If memory serves, insurance companies earned the "big bad wolf" stigma as a result of being a perceived obstacle for people who need quality care but are told to, “suck it up because it’s too expensive.” Is this just another way of saying “suck it up” without being as brash?
Issues Associated with Consumer-Directed Health Care
While there are some consumers enthused about this kind of health care insurance, as are most employers who find that it’s more kind to their bottom line, the sick, the elderly, and person with low-to-moderate income are not enthused. One reason is that consumer-directed insurance usually means the consumer will pay high-deductibles. With traditional insurance, many employees who are chronically ill or who have seriously ill family members benefited from employer coverage or other large pooling arrangements, since it distributes the risks. Unfortunately, there’s no end for the consumer-directed plans in sight, the shift has only scratched the surface.
According to Mercer, a consulting firm, 44 percent out of approximately 2,000 large employers surveyed planned to make workers pay a higher portion of their health insurance premiums this year. This is up from 40 percent in 2008.
This has some asking, “Should consumer-directed health plans be considered a perk? Or better yet, can this form of health care accurately be labeled as a consumer-directed plan? If the only research one had was the simplest definition on which to base their response, he or she would no doubt come to the conclusion that consumer-directed insurance is nothing more than double speak. A poor attempt to convince consumers that they are not getting the shaft. So of those who may be smiling, like the insurance companies and employers, those most impacted certainly are not. Accordingly, he Consumers Union has publicized its disapproval. The organization refers to the plan as misnamed and misguided, has raised eyebrows about this kind of health care. It urges policy makers to resist proclaiming consumer-directed insurance as a remedy for the health insurance crisis that faces 43.6 million uninsured consumers and tens of millions of under-insured consumers.
Employer provided healthcare may decline.
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