Do You Have A CDHP Yet? From Nowhere to Nearly Half of Large Employers Offer One

What’s a CDHP? It’s a Consumer Directed Health Plan. This is a fairly recent option for health insurance consumers who want to take a more active role in managing their health expenses.

An annual survey of 453 large U.S. employers shows that 47% now offer this option, up from just 33% in 2006. The advantage for the employee is that he can set aside pre-tax dollars for expected health care expenses. This class of benefits includes: the HSA, the HRA, and also flexible spending accounts.

It may astound you to learn that you can put your set-aside funds on a dedicated piece of plastic now. The technology is such that you can keep track of two such accounts on one prepaid or debit card. This means that you could keep both your HAS and your limited purpose FSA on the same card. This means that the consumer can even use this one card for their pharmacy expenses.

What is behind the stunningly fast growth of the CDHP?

The number one reason is this: Companies that have them report growth of medical expenses at HALF the rate of those companies without them.

A secondary reason is that employers can tailor their offerings to the needs of their employees, to a degree impossible for traditional group plans.

The attitude of both employers and employees shows a willingness to consume health care data in a mutual effort to contain expenses. For example, check out websites for Aetna or WellPoint. WellPoint has a program to allow patients to rate their doctors (you may have heard about this program in other media). Aetna launched a new website where customers can consult health records about health risks, medical costs, and local doctors.

May I add that some employers are going in another direction entirely. This is where they do NOT offer insurance directly, but contract with administrators such as Administaff; the employee simply selects whichever coverages he or she would like deducted from the paycheck.

I have to admit I scratch my head wondering where we are supposed to find the time to do an accurate assessment of all this data that is being thrown at us. While the younger generation may be theoretically able to access information on the internet, there is still the problem of having the time to properly analyze and assess all this data.

Somehow I think that something is being slipped by us while we read the directions handed to us in a ‘drive thru’ healthcare system. One issue still not directly addressed is that while we can compare prices between hospitals in our network, we may learn that the exact same procedure may be $2,000 cheaper at a hospital in the next county. Unfortunately the insurance program does not allow us to go outside the network for the county we reside in!

How are you going to fix that, Mr. CDHP?