There is a lot of confusion in the healthcare market, much of it around Obamacare and Consumer Directed Health Care, which are on opposite sides of the spectrum.
I found this article, http://alineofsight.com/policy/obamacare-vs-consumer-directed-health-care, which I found incredibly enlightening and this sentence sums up what has to happen in healthcare. “The bottom line is that individual consumer choice must increase and government’s heavy hand decrease, in order to bolster vitality in the medical market.”
As I’ve said before, healthcare is the only industry where people do not know how much something costs before they purchase it. Consumers historically have not price shopped in healthcare because the cost has typically been covered by insurance and even if they wanted to find out the price, it is almost impossible to track down a price. If you ask a hospital how much their services cost, I can almost guarantee you that they either will not know or have to do a lot of digging to come up with an answer. In addition to price, many people do not educate themselves on where to find the best healthcare. They don’t ask questions like, is the Doctor they were referred to to replace their hip the best Doctor in their area? Either these consumers do not have a choice of Doctor due to their health insurance, or they simply do not take the time to do any research. This goes back the point that consumer choice, and education I might add, need to increase.
The article goes on to say that “…despite Obamacare’s siren song of increased coverage and cost containment, most employers and individuals have seen their health costs continue to rise. That’s contributed to a steady stream toward consumer-directed health plans, or CDHPs.”
“Businesses, which will face an employer mandate to provide worker health coverage or else pay a penalty in another couple of years, and individuals have increasingly opted for consumer-directed options such as high-deductible health insurance and health savings accounts. Other consumer-oriented products include flexible spending accounts and health reimbursement accounts.”
“Consumer-directed health care is especially attractive to small businesses. Kaiser Family Foundation has found these options more prevalent at companies with fewer than 200 workers. About half of small businesses’ employees have high-deductible coverage.”
“The key to consumer empowerment through CDHPs lies in consumers having cash saved up to take care of medical costs themselves, up to a point. That’s where HSAs come in.”
“Consumers can be socking away savings in a HSA, and employers may contribute to their workers’ HSA. This money is tax-free, up to $3,100 annual contributions for individuals and $6,250 for families, and belongs to the consumer. Out-of-pocket costs to consumers can’t be higher than $6,050 for individuals and $12,100 for families in a year.”
“HSA funds are portable from job to job and there in retirement. Whatever amount saved and interest earned remains at the end of each year, it simply rolls over and remains available for future medical needs.”
“And that’s what makes the CDHP model work best. Patients take care of the first dollars for routine medical needs, insurance kicks in if the annual deductible is reached and out-of-pocket costs are capped for patients. Still, even on those services paid out-of-pocket using the HSA, consumers get their insurer’s negotiated rates.”
“Thus, employers save on their health budget by providing consumer-directed insurance carrying a high deductible and paying some into employee HSAs. Insurers save by avoiding costly administrative involvement for routine transactions the patient-consumer now takes care of himself.”
“And individual consumers pay lower insurance premiums while saving tax-advantaged dollars in a dedicated health savings account. They become involved consumers, more attentive to and responsible for what typically are more frequent medical needs — regular check-ups, prescriptions, emergencies that require an X-ray or stitches or a cast, but aren’t usually life-threatening. This consumer behavior by attentive individuals combines those countless interactions to constrain the nation’s health costs.”
“The short-sighted, red tape-ridden Obamacare approach just doesn’t trust the marketplace. Nor does it trust Americans to make their own health care choices.”
The article goes on to discuss Obamacare. No matter how you slice it, consumers win when they take control of their own health lifestyle and health care choices.
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