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Escalating health care costs have meant that better quality medical facilities are beyond the reach of many in the United States. In addition, rising health insurance premiums are exacerbating the health crisis. Since most employees have health insurance from their employer, the rising costs of health insurance also have a negative impact on the labor market. Healthcare reform is not likely to solve all problems. In recent years, consumer-centric healthcare is rapidly gaining traction, and some see this approach as one of the solutions to solving the healthcare crisis.
Consumer Driven Health Care is an insurance and healthcare management system that gives consumers more control over how their healthcare funds are spent. This healthcare system allows employers to set up accounts for employees to pay for their healthcare without involving third parties. Consumers have more opportunities to make direct decisions related to their health plan. In addition, they may be better informed about their choices and economic purchasing power is also in their hands.
Typically, consumer-centric health plans include the Health Care Reimbursement Account (HCRA); Medical Savings Account (MSA); Health Savings Accounts (HSAs); Flexible Spending Accounts (FSAs). However, these plans come with their own pros and cons, and one must weigh them carefully before choosing the right consumer-focused health plan.
HCRAs allow workers to use employer contributions only for medical expenses or to pay health insurance premiums, while FSAs allow workers to significantly reduce their income tax liability through pay cuts. They can also pay part of their salary into a health care account. MSA allows annual rollovers and is controlled by the individual. It pays for regular healthcare services. In HSAs, both employees and employers can contribute in the same year; The account can also be created by an individual or sponsored by the employer.
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