Consumer-Driven Health Plans: A Cost and Utilization Analysis

A consumer-driven health plan (CDHP), also known as a consumer-directed health plan, is a health insurance plan design increasingly prevalent in the United States. CDHPs are a specific type of high-deductible health plan generally including a health savings account (HSA) or a health reimbursement arrangement (HRA). Compared to traditional commercial health plans—such as a health maintenance organization (HMO), preferred provider organization (PPO), or point of service (POS) plan type—CDHPs typically have lower premium rates in exchange for higher minimum deductibles and higher maximum out-of-pocket limits. Though benefit designs vary from plan to plan, these higher minimum deductibles generally require more consumer dollars to be spent out of pocket before the insurer begins to pay a portion of the costs. When deductibles are met, cost sharing between the insurer and consumer begins, and the insurer becomes responsible for a larger percentage of the consumer’s incurred medical expenses. Thus, higher minimum deductibles generally lead to higher consumer yearly maximum out-of-pocket burdens. Through these higher minimum deductibles, CDHPs attempt to alter their consumers’ behavior by placing greater monetary responsibility on consumers in the hopes of reducing the use of unnecessary care and spending. 4