Thursday, October 8, 2009
Health Tip of the Week: October 5, 2009
High Deductible Health Plans - Consumerism Returns to Health Care
There are many benefits to implementing a high deductible health plan today. For employers, fully insured high deductible health plans can help contain the rising rate inflation by reducing premiums when electing a higher deductible than their current fully insured plan. For example, a broker may encourage an employer to move from a $500 deductible to a $1,000 deductible and save around 15-20% on their rates. They may suggest this move in order to reduce the rates for their client to offset the 10-15% rate increase they are receiving on renewal.
A second benefit to implementing a high deductible health plan is the ability to bring awareness of cost to an employer group. By raising the deductible that the employee is responsible for from $500 to $1,000 or $3,000, the employee has more liability in paying out of pocket to satisfy the deductible. As a result many will argue that a high deductible health plan can be the solution in cutting on over utilization that many employers experience by offering a lower deductible. Because the employee is responsible for paying more money than prior year to meet their deductible, the employee is more likely to shop for the best price in health care and is less likely to abuse trips to the emergency room. This will also enable the employer to control the improper use of medical facilities that occurs with a lower deductible.
Many employees do not realize how great the cost of group health insurance truly is for the employer and because it is not their money at hand they are more likely to abuse utilization.
For more information about high deductible health plans' components and how to correctly implement one for a group health insurance plan, please visit this website.