NCPA - National Center for Policy Analysis

CONSUMER-DIRECTED HEALTH PLANS

August 18, 2004

There has been an increase in the popularity of consumer-directed health plans, which have double or triple the deductibles of traditional health plans and offer incentives and support to help people spend their health care dollars wisely.

  • The plans, which currently account for about 2 percent of the market, are anticipated to grow to curb employers' rising health care costs.
  • The idea behind the plans is that when consumers are held solely responsible for a medical bill, they tend to think twice.
  • The plans take some control over spending away from employers and insurance companies, usually allowing consumers to select their doctors and hospitals.
  • Critics say that such health care plans place a larger share of the costs on consumers and could dissuade them from seeking out needed care.

Forrester Research, an independent technology research firm, predicts consumer-directed plans could account for 7 percent of health insurance by 2007 and about 25 percent in five years.

Source: Shari Roan, "More Choice, at a Cost," Los Angeles Times, August 16, 2004 and Bradford J. Holmes, "Who Wants Consumer-Directed Health Plans," December 31, 2003.

 

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