Consumer Directed Health Care (CDHC)
Consumer Directed Health Care puts the decision of care back in the hands of the individual and the payer, creating a shared cost-controlled environment. Benefits managers, policymakers, employers, and insurers have a growing interest in an insurance approach titled “consumer-directed health care.”
This term applies to a broad range of health plan designs that combine high-deductible health insurance plans with a tax-preferred savings account. CDHA also uses Health Savings Accounts (HSA) or Health Reimbursement Accounts (HRA) for routine health care expenses. HSA and HRA accounts are both tax-deferred health accounts but have differences in their legal requirements and incentives.
HSA accounts are necessary when an individual has a high deductible health plan, In a typical Consumer-Directed Health Care (CDHA) model, routine health care expenses are paid from this savings account. When the HSA is depleted individuals pay out-of-pocket until the high deductible ceiling in their health plan is met. Monthly premiums for high deductible insurance plans are lower than the traditional health insurance plan, making them more affordable for employers. Consumers may keep unspent HSA money, providing an additional incentive to be cost-conscious when choosing health services. Employers, employees or self-employed individuals can contribute to the HSA’s. Currently these contributions are tax-exempt dollars to the recipient and a tax deduction for the employer.
With the emergence of the CDHA model, more U.S. insurers and employers will encourage patients to travel within and out of the country for lower-priced, high-quality medical care. The savings and tax advantages are shared by insurers, employers, and patients. U.S. facilities are encouraged to compete differently in order to remain competitive. MTM can negotiate fixed-rate patient packages, per procedure and per provider for any employer’s benefit plan.
Consumer Directed Health Care with a global travel arrangement is a financial win-win situation for all. Employers are able to save by offering lower-cost high deductible plans. Employees save through their tax-deferred health savings accounts and a lower health care premium. The savings in their accounts cover the ordinary health care costs and are credited towards the plan’s deductible. A customized treatment package for expensive medical treatments offers quality health care in a global setting.
The MTM e-Catalog provides specific information on products, prices, packages, providers and destinations in Global Health Care – Medical Travel – Medical Tourism