By example; a health plan may offer an employee a  $1,000 annual Healthcare Spending Account, combined with the Business Owners Group Health Insurance coverage, that has a $2,500 deductible.  Once the employee has used the HSA limit of $1,000 in medical expenses, the next $1,500 must be paid by the employee.  At that time the insurance coverage issued may only pay 80% of any additional medical costs, depending on the plan.  The objective is to provide more employee choice by having the employee become involved DIRECTLY in the expenses.

Under new IRS regulations, funds unspent in medical spending accounts can be retained by the employee and rolled over from year to year. This could allow health workers to accumulate thousands of dollars in the health spending account, for future year health problems.

The driving force behind any and all so called Consumer Driven Health Care Insurance coverage and savings plans is that, “if consumer’s are given an economic stake in the medical care and cost decisions THEY make, it is believed they will spend less and control costs better than is done now.  It is well known by everyone that Hospitals and Doctors charge less to individual cash payers with NO insurance than those that have full insurance coverage.  Traditional insurance and managed care programs give consumers little incentive to watch their usage or their costs.  The co-payment is not an issue when everything above is 100% paid.  One of the trade-offs may be that the consumer will be able to go to a Doctor of choice, purchase brand name or generic drugs.

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