1 consumer driven experience. 2 what is consumer driven health care? consumer driven health care...
Post on 21-Dec-2015
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Consumer Driven Experience
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What is Consumer Driven Health Care?
• Consumer Driven Health Care offers a medical plan partnered with a tax-advantaged account to offset the cost of the medical plan deductible and coinsurance.
• Consumer Driven Health Care encourages members take a more active role in managing their health care and health care services.
• Medical plans that are considered Consumer Driven Health Care are most often no co-pay plans. Preventive services may be covered at 100%, but all other services require the member to meet their deductible first, prior to the coinsurance paying any percentage of the cost.
• To help the member pay for those first dollar charges, the IRS allows tax-advantaged accounts such as Health Savings Accounts or Health Reimbursement Accounts.
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Difference between Health Savings Accounts and Health Reimbursement Accounts
CDHP with Health Savings Account
• Account owned by the employee
• Account portable
• Tax free distribution of funds if used for medical expenses (this includes all 213d expenses as well as qualified long term care insurance premiums and certain medical premiums)
• IRS allows distribution from account for non qualified expenses with income tax and 20% penalty tax.
• May roll over from year to year and continue to earn interest
• May be invested in mutual funds
CDHP with Health Reimbursement Account
• Employer provided (and owned account)
• Account not portable
• Employer decides if other expenses may apply (may include all 213d expenses)
• May roll over from year to year
• Typically forfeited when leaving the group
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How Consumer Driven Health Care Has Performed
• Nationally there are over 9 million individuals participating in Consumer Driven Health Care.
• Nationally
• Within the first year, trend generally decreases 4-5%
• Savings after the first year indicates trend rates lower than the traditional plans by 3-5%
• Cost savings not generated by avoidance of appropriate care
• Significant increase in CDH members seeking preventive care
• CDH members received recommended care for chronic conditions at the same or higher level than traditional (non-CDH) plan participants
* Emerging Data on Consumer Driven Health Plans, May 2009, American Academy of Actuaries
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UnitedHealthcare CDHP Experience
Delivers lower cost, sustained over time
Overall, Consumer Driven Health Plan members cost 10-12% less
Consumers make better choices about prescriptions
Prescription costs were less in CDH plans, while utilization rates were equivalent
82-87% savings based on changes in utilization, not member cost shifting
CDH members seek preventive care at the same rate as PPO members.
Over two years, 30% deeper decline in hospital admissions than did traditional plans
Emergency Room visits also declined in Health Savings Account Plans 8%
Full replacement slows cost growth
10% slower growth in plan cost by following year, compared to employers offering HSAs as an option at enrollment.
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An Experienced Partner
• 10 years’ experience as leader in health consumerism
• 3.2 million members are in either an HSA or HRA
25,000+ employer clients
Private Sector: 93%
Public Sector: 7%,
Public Sector consumer driven health care RFPs up 20% from 2009.
OptumHealth Bank
• Over 569,000 Health Savings Accounts
• Over 20,000 HSA employers
• Over $1 Billion dollars in balances on deposit
• Over $48 Million dollars held in investments
• Average account balance $1616.00
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Why a Health Savings Account
• A Health Savings Account (HSA) is tax-advantaged
• Contributions are made pre-tax and funds can grow tax free
• Owned by the account holder
• Money left in the account holder’s account carries over from year to year
• It remains the individual account holder’s even if they leave their employer or retire
• Used to pay for both current and/or future health care expenses
• Account holder can withdraw money tax-free for qualified health expenses (non-qualified expenses are subject to taxes and penalties)
• Or account holder can save funds to pay for future expenses
• Funding of a Health Savings Account may be made by
• Employer
• Employee
• Interested Party
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Best Practices
• 100% coverage for preventive care
• Individual deductibles of $1,500 – $2,000 are common
• Apply coinsurance after the deductible at approximately 80%
• Include preventive pharmacy in the deductible and account
• Employer contributions to the HSA
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HSA Plan Components
OOP MaximumCoinsurance20%
Deductible
Amount that needs to be satisfied before health coverage begins.
Preventive care not subject to deductible.
Protects member from high costs.
Coinsurance similar to traditional plans.
Out-of-pocket maximums are in place for added peace of mind.
Health Savings AccountOption to reimburse from Health Savings Account for Deductible and Coinsurance or save funds for future medical expenses.
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Employee Only: HSA Example
Your HSA Account
$750 from OC
$750 self contributions
= $1500
Deductible Coinsurance
20%
OOP Maximum
$1500 $3000
Your Expenses
$0 – Physical
$150 – Prescriptions
$75 – Doctor’s Visit
$125 – Urgent Care
= $350 Total Expenses
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How Did it Work?
You Had:
• $1,500 in HSA
• $350 in expenses
You Paid:
• $350 from HSA
• $0 Out of Pocket
• $1,150 Rolls from the HSA to Next Year!
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Employee Only: HSA Example - Year Two
Your HSA Account
• $1,150 Rollover
• $750 from County contribution
• $750 Self-Contribution
= $2,650 Balance
Deductible Coinsurance
20%
OOP Maximum
$1500 $3000
Your Expenses
• $0 Physical
• $225 Prescriptions
• $275 Three Doctor’s Visits
• $22,000 Hospital
= $23,000 Total Expenses
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How Did it Work?
You Had:
• $2,650 in HSA
• $23,000 in expenses
You Paid:
• $2,650 from HSA
• $350 out of pocket
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Growing Funds
• Deposit Account
• Provides liquidity for transactional needs
• Option to select among various types of accounts targeted to meet your unique spending/saving patterns, including two account options that pay interest (Interest rate is accrued daily; paid monthly)
• OptumHealth Bank’s deposits are insured by the Federal Deposit Insurance Corporation to at least $250,000 for each depositor. (FDIC insurance rate is inflated currently, due to regulatory changes)
• Low maintenance fees are industry competitive
*Interest rates are subject to change.
Maximizing Value for Tax-free Growth
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Growing Funds
• Investment Options
• Provides potential greater investment return for long-term growth
• Funds over established threshold amount may be directed into mutual fund(s) in $100 increments
• Account holders must retain at least the threshold amount in their HSA deposit account after transfer.
• Separate disclosures required – not FDIC insured
• Access via website or Interactive Voice Response (IVR)
• Integrated statements – deposit and investment accounts combined – viewable online
• Auto sweep functionality
Maximizing Value for Tax-deferred Growth
Any investments in mutual funds are not FDIC-insured, are not guaranteed by OptumHealth Bank, and may lose value.
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It’s Easy To Access Funds
• The HSA debit card can be used to pay for qualified expenses such as doctor’s visits, prescription drugs and vision care.
Employees may also access HSA funds through:
Online bill payment at MyUHC.com (free)
Checks, if you choose to purchase them ($10 for a book of 25)
Account holder can elect to receive additional cards for spouse or dependents for no additional cost
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Pre-enrollmentGoal: Awareness• Train the Trainer Seminar
• Webinars
• Flash presentations
• “People Like Me” Stories
• Lunch and Learns
• Brochures and handouts
EnrollmentGoal: Understanding
• Onsite open enrollment assistance at designated offices
• Multimedia presentations
• Opening Your Account
• Using Your Account
• Targeted email campaigns
Post-enrollmentGoal: Engagement• User Guide
• Bi Monthly Electronic Newsletter
• Targeted email campaigns
Snapshot of the Education and Engagement Program