As health insurance premiums spiral upward, employers are shifting these costs on to their workers in the form of consumer-directed health plans. Nearly a third of large and midsize companies now offer high-deductible health plans combined with a health savings account or health reimbursement plan, according to a recent Watson Wyatt Worldwide and National Business Group on Health survey. This is more than twice as many employers as in 2005.
These programs get employees more involved in healthcare decision making-whether workers like it or not. A March survey of 10,000 U.S. workers by the staffing and consulting firm Hudson showed employees have distinctly mixed feelings about health savings accounts, with only 37 percent of workers having a favorable opinion of them and the rest either unfavorable or unsure.
Here are some ways to make the best of a consumer-directed health plan:
Learn as much as you can. Workers with consumer-directed health plans are generally expected to pay for the first several thousand dollars of healthcare expenses but are usually covered after that. If you have a high-deductible health plan with a deductible of at least $1,050 for self-coverage or $2,100 for family coverage, you are eligible to participate in a health savings account in which you deposit money on a tax-free basis for future qualified medical and retiree health expenses. More information about setting up a health savings account is available from the Treasury Department website; click on health savings accounts.
Ask questions. Find out exactly how much you will be responsible for paying out of your own pocket. Ask your employer which procedures will be covered after you reach the deductible. Determine what types of catastrophic care are provided for. The Watson Wyatt study found that to achieve cost savings, high-deductible plans must be combined with other practices that consider provider quality, focus on improving the health of workers, rely on data and hard evidence, and encourage the appropriate use of medical services. So, find out what services your employer provides, and take advantage of them.
Take inventory. Employees with high-deductible health plans are less satisfied with their health plan than those with comprehensive insurance and are more likely to avoid or delay needed care, according to a 2005 survey by the Employee Benefit Research Institute and the Commonwealth Fund. Don't let yourself fall into the trap of avoiding care. Take inventory of your personal health situation, suggests Wayne Gattinella, CEO of WebMD. List any conditions you now have, and take a family history to get hints of health trouble spots ahead.
Plan ahead. Ask yourself, "What do I expect the cost of my healthcare needs to be? And how much do I need to start saving today for that point in time?" advises Gattinella. "A health savings account is really the healthcare equivalent of a 401(k)." Much like planning for retirement, the goal is to calculate what your future healthcare needs are likely to be and make sure that you have enough money in your health savings account to treat any conditions that arise.
Get on the Web. Ideally, employees with consumer-directed health plans would have upfront information about the quality and price of the medical care they would like to receive. If your employer doesn't provide you with detailed information, you'll have to research specific topics on the Web. "The medical literature and the Web have an abundance of studies on specific topics," says Alan Garber, director of the Center for Health Policy at Stanford University. "The best of these studies can give patients a good idea about whether the treatment their doctor recommends is a good use of their money." But make sure that you get your information from a reliable source. Garber recommends independent groups like the Cochrane Collaborationand Consumers Union. Of course, there is no substitute for the diagnosis of your personal physician, but you can read up about diseases and conditions at the Mayo Clinic, WebMD, the Centers for Disease Control and Prevention, and U.S. News.