Consumer-driven healthcare

Consumer-driven healthcare (CDHC), or consumer-driven health plans (CDHP) refers to a type of health insurance plan that allows employers and/or employees to utilize pretax money to help pay for medical expenses not covered by their health plan. These plans are linked to health savings accounts (HSAs), health reimbursement accounts (HRAs), or similar medical payment accounts. Users keep any unused balance or "rollover" at the end of the year to increase future balances or to invest for future expenses. They are a high-deductible health plan which has cheaper premiums but higher out of pocket expenses, and as such are seen as a cost effective means for companies to provide health care for their employees.^[1]

In this system, health care costs are first paid for by an allotment of money provided by the employer in an HSA or HRA. Once health care costs have used up this amount, the consumer pays for health care until the deductible is reached, after this point, it operates similar to a typical PPO. Once the out-of-pocket maximum is reached, the health plan pays all further costs.^[2]

CDHC plans are subject to the provisions of the Affordable Care Act, which mandates that routine or health maintenance claims must be covered, with no cost-sharing (copays, co-insurance, or deductibles) to the patient.

Proponents suggest the plans increase free-market variables in the healthcare system, fostering competition, which, in turn, lowers prices and stimulates improvements in service. Critics argue they cause those less wealthy and educated to avoid needed and appropriate healthcare because of the cost burden.