Consumer-driven health care (CDHC) is based on a basic belief that individuals should play more of a direct role in managing the costs of their own health care, which should help them make wiser decisions about their use of the health care system. This idea has been slowly gaining acceptance for several years, in part due to the escalating costs to employers of other forms of health insurance. So far it is more common in very large companies, but it will likely trickle down to smaller companies over time.

The term “CDHC” can include a wide variety of plans. The most common consumer-driven plan pairs a health savings account (HSA) with a high deductible ($5,000 or more) insurance plan. Employers and employees make pre-tax contributions to the HSA, which can be used to pay for routine and preventative medical care. The insurance provides coverage for catastrophic or high-cost events. Typically, any unused amounts in the savings account can be rolled over and used in subsequent plan years.

Another so-called CDHC plan design offers a broad menu of health care choices with varying contribution levels that an employee can choose from at enrollment. This is more accurately referred to as a defined contribution plan, but it is often described as consumer-driven, since the employer gives each employee a fixed dollar contribution to apply to the available health care options.

Because each employee is responsible for making more of their own decisions around their health care, a key component of successful consumer-driven health care plans is providing a set of tools to assist people in understanding the complex health care system. While the lower overall costs may attract interest from budget-minded benefits managers, employee satisfaction can be seriously affected if workers feel that they are being left on their own.

Due to the small number of companies currently offering true CDHC plans, reliable data on average deductibles and worker contributions is not yet available. However the level of interest shown by many large companies suggests that these plans will quickly become more popular. In fact, some experts predict that CDHC will almost completely replace managed health care plans in just a few years, much like managed health care did to traditional insurance.