Frequently Asked Questions

What is consumer-driven healthcare (CDH)?

Consumer-driven healthcare (CDH) represents a new way in which healthcare is financed and managed. Most traditional fee-for-service or managed care health plans charge high monthly premiums in exchange for low deductibles, small co-insurance payments and low out-of-pocket costs. These plans don't give the consumer an incentive to shop for the lowest cost of services or make judicious use of health benefits. CDH plans put greater decision-making capability in the hands of the consumer and provide the consumer with a financial incentive to keep healthcare expenses low. CDH typically consists of two components: A personal account to pay for routine healthcare expenses. These accounts are typically funded in part or whole by the employer, and can take the form of a Healthcare Savings Account (HSA) or a Healthcare Reimbursement Account (HRA). In the case of a HSA, the account is completely in the control of the employee and any balance in the account is portable and can be carried over from year to year. An insurance plan with a relatively high deductible, with premiums typically paid in part or whole by the employer. As with any plan the employee is responsible for health care expenses until the deductible has been met. Once the deductible has been met, high deductible health plans (HDHPs) provide benefits that are very similar to traditional fee-for-service or managed care plans.

« Back to questions