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Taking Consumer-Driven Health to the Bank


By Joseph Goedert, News Editor June 2007
Participation in consumer-driven health plans has not yet caught on to the degree proponents envisioned. Still, the number of consumers covered by these high-deductible plans that are coupled with health savings accounts isn't inconsequential.

A new study from America's Health Insurance Plans, a trade association, estimates that 4.5 million Americans now have HSA-based coverage. That compares with 3.2 million enrollees in the 2006 study and 1 million in 2005.

Insurers offering the plans acknowledge enrollment hasn't been overwhelming, but point out that it's growing rapidly. As of January 2007, Bloomfield, Conn.-based Cigna HealthCare, for one, had 500,000 members with a high deductible plan, double the number a year ago.

Consumer-driven health plans change all the rules of procuring and paying for health care. And with a new rulebook comes a new player-banks-which have sophisticated electronic data interchange capabilities and see HSAs as a lucrative financial market.

The business of banks is managing money, and the tax-free HSAs-which can roll over annually and be invested in a number of ways-represent a new and potentially profitable business line.

But while banks seek inroads into the health care market, insurers and employers also are trying to stake their claims in consumer-driven health.

Several Blue Cross and Blue Shield plans are positioning themselves to offer both insurance and banking services through Blue Healthcare Bank, created by the national Blue Cross Blue Shield Association and recently awarded a banking charter by the federal government.

HSA 101

Consumer-driven health plans have added another layer of complexity to the health care payment process, says Donald Whitford, director of product development and management at Blue Cross and Blue Shield of Michigan, based in Detroit.

Patients are accustomed to shelling out minimal copays and letting insurance companies and providers worry about the rest of the bill. In this new environment, they need to better understand insurance payment rules and provider pricing policies.

As consumer-driven health expands, more consumers will face that added complexity as employers push their employees toward accepting these plans, Whitford predicts.

Employers offering the plans as an option will get more creative with incentives to get more enrollments, he believes. But overall, the nation will see employers start to offer high-deductible plans with a savings account as the only option.

That's already happening with a number of smaller employers and a few large ones. Kansas City, Mo.-based Cerner Corp. started offering consumer-driven health plans in 2005. Such benefit plans now are the only ones available at the health care I.T. vendor.

Some employers, Whitford notes, are starting to offer HSAs to new employees as their only health benefits option as a stepping-stone toward making a total changeover. "There will always be a place for PPO/managed care plans," he says. "But consumer-driven health plans will take a bigger chunk of the market."

Under the high-deductible health plan model, a consumer, through an HSA or similar account, is responsible for paying health care expenses each year up to a certain level before insurance coverage kicks in. The consumer also can use remaining HSA funds to cover copays and other costs not covered by insurance after the deductible is reached. The deductible varies, but a ballpark amount is about $2,400 for an individual and $5,600 for a family.

Regardless of how they are funded, consumer-driven plans are designed to force consumers to be more conscious of their health care decisions-such as taking better care of themselves and being better "shoppers"-because they must pay for health care out of the savings account until the deductible is reached.

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