Scads and the Importance to Consumers Introduction For sure, consumer-driven health plans (CHAD) have been around since the sass, since its inception by health e-commerce ventures. CHAD is a saving account that is pre-taxed, and is to be used for medical expenses. In-network providers’ discount may are sometimes offered, however, it is not offered to enrollees who are restricted to choose their own treatment centers or health care providers. In this assignment, I will show the history of CHAD and how, why and when it was introduced. Some advantages and disadvantages will also be discussed.
Details of the different kinds of health plans will be highlighted. Above all, I will give reason why I would not recommend this type of health care plan and its affects on society. With CHAD, the enrollees are usually entitled to, less benefits, and costs-haring that higher that enrollees in the customary plans. Since its inception in the sass, consumer-driven health plans or CHAD has progressed by shifting to create a health benefit that pairs with a health plan that has a high deductible, thus paying top dollars for the expenses incurred by medical care. Parent, 2006) The introduction of nonuser-driven health plans (CHAD) has caused health care price to sky rocket, and leave gaps in the quality of care. According Lee, (2006), “The Institute of Medicine, has addressed the problems that have arise which include the patient care quality inconsistence, practice variation that are unjustifiable, and delivery of services that is harmful to patients. They also noted the shortcomings in quality and efficiency due to the CHAD. Lee, 2006) History of when, how, and why Scads were developed Employees health benefits were usually paid for by employers before the year 980, and as patients, employees were allowed to seek out in for their providers themselves. Both providers and patients were contented with this system due to the fact that the patients’ accessibility to care was fairly easy. After a patient’s visit to the health care provider, the provider was reimbursed by a third party payer for any types of services in any quantity.
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The employer footed the cost of most of this payment due to the code of the Federal Income Tax, which stipulated that pre-taxed dollars could pay for healthcare cost barring that the cost of the health care benefits as paid by the employer. According to Samuel et al, (2003) patients utilized quality Economics By cobbler’s fee-for-service kind of system; thus, patients, government and insurers bearing the cost today. (Samuel et al, 2003) However, as time progressed, they grew very unsatisfied.
Consequently, the size of the providers’ networks were cut down by the organizations of managed care in order to maintain the control of cost, employers’ satisfaction and to support the health care providers. Sometime during this period, the managed care model of Preferred provider organization (POP) surfaced. Today engaged care is handle by preferred provider organization (POPS), and other staff and group model health maintenance (Homos), point-of-service Homos and independent-practice association. (PA). U. S. Health care used methods of payments, which included fee-for-service and capitation.
When these methods failed, the introduction of the consumer-driven health plan emerged. Still, the Consumer-driven health plan was introduced in the sass according to Samuel et, al (2003) and for the past fifteen years have been directing patients to managed care organization where they are seen by limited health care providers who re provided with economic rewards for handling the health care of these patients. By doing so, patients are restricted to the types and number of services that can be performed on them.
The employers are given incentives of receiving lowered prices for health plans; hence they have more available financial resources for salaries and other employees’ compensation. In the beginning, employees were happy with this type of managed care because due to reduced cost in health benefits they were rewarded with larger salary increases. (Samuel et al, 2006) Health Reimbursement Arrangement (HEAR) Above all, these types of accounts help consumers by providing them with incentives to enhance their involvement of their spending on health care.
Health Reimbursement Arrangement (HEAR) is used to pay for medical expenses that meets the qualification and is fully funded (100%), by the employer. This arrangement makes payments for medical coverage in a given year until all the funds from it has been depleted. The amount of such contribution is a figure that is usually set by the employer. The employer also can make assessment of what exactly the funds should be used for and whether or not the remaining or unused funds for the particular ear ending should be rolled over into the following year’s funds.
In event that the employee leaves the Job for whatever reason(s), the balance of the Health Reimbursement Account (HEAR) cannot go with the individual. (Health Equity, n. D. ) Health Reimbursement Arrangement’s method allows the employer to pass on to their employee, health plan with high deductibles and to establish a payment for the employees’ out-of-pocket medical expenses. Heath Equity, (n. D. ) went on to say that an employee is not allowed go over the limit of the account or incur additional medical expenses, without paying back for these additional medical expenses from UT-of-pocket.
A very good example of Health Reimbursement Arrangement took place when I was employed at my previous Job. Our regular visit had a co-payment of $75. 00, and $100. 00 for a visit to a specialist. At the beginning of each fiscal year (the insurer’s who was Oxford), their representatives would come into the workplace and explain the different plans and updated on any current changes. They also This was the amount that our employers allowed for each employee to have as an incentive for having such high co-payments. This credit card was only to be used at health care facilities that accepted credit cards as payments.
It was good for co- payments for office and emergency room visits, however, not usable for the purchase of prescription medications. Unfortunately, if your physician did not accept payments via credit card, you were able to pay in cash and accept a receipt, which you faxed over to the credit card account (La Difference) for reimbursement; paid on the 1 5th and the last day of each month. My only problem with this method was that sometimes you might not have the full amount in cash for the co-payment up front even though it was to be reimbursed.
My primary care physician (PC) did not have he credit card method at first, but I made sure that I followed up with the office until they did, and I was even informed by them that they were happy they did. Flexible Spending Account (FSP) Likewise, these accounts are used to pay for some medical and dental expenses. There are limits of $2,500 a year on these types of accounts, which are supplementary to healthcare plans that are based on an individual’s Job. The monies in these accounts are pre-taxed, which means that one does not have to pay taxes on this money… He amount from the taxes you would have paid on the money is also saved. Eaten, 2013) Even so, the maximum that can go into this type of account is $2,500, which usually, is required to be used in the year of the plan. However, the employer is at liberty to extend the time by giving a “grace period” of one to three months by which time all the monies in the flexible spending account should be depleted. The employer may also choose to allow the employee to carry over a maximum of $500 to be used in the year to come. The employer; can grant only one of the prior offers to each employee, as he/she cannot extend both to their employees.
Thus the employee loses whatever “left-over” money in the Flexible Spending Account at the end of the year and/or the grace period. It is therefore wise not to invest too much money in this type of program. (Eaten, 2013) Incidentally, a perfect example is at my current Job we do have this type of program by which the funds is to be used for assistance with the purchasing of mail prescription medication, and/or medication bought over-the-counter with a prescription from a physician. The only reimbursement that is allowed without a prescription is for individuals who use insulin.
We also can use this account to pay for other medical supplies such as bandages, surgical shoes, crutches, and blood sugar test kits diagnostic supplies). Health Saving Account (HAS) According to Treasury. Gob, (2013), “Health saving accounts was introduced in 2003 to provide individuals who are covered by health plans with high-deductibles to receive treatment (tax-preferred) on any money saved in this type of account to be used for medical expenses. This account is available to adult with high deductible health care plans, if they have no other cover (first dollar).
Money from an HAS can be used to cover payment for a wide range of medical expenses like prescription glasses to physical therapy. Because this money is tax-deductible, all monies withdrawn are to taxed federally, providing that it is spent on things that are related to health. Even the interest on these health saving accounts are not federally taxed. Future expenses that they may incur surrounding their health. This account is similar to an AIR saving account, but only for health purposes. Upon reaching the age of 65 years, this money can be withdrawn and used for any expenses even though not related to health care.
HAS monies are not to be used for premiums of health insurance unless the employee is unemployed, and there is maximum amount that can be save in these types of accounts. As an individual, you are entitled to have a maximum of $3,100. However, as recently as 2013, the maximum is now $3,250 for a single person, while couples could save up to $6,450 according to the US Treasury, 2013. Segment of population and socioeconomic group is likely to benefit from Scads Equally important, is that healthy families without children are the ones who are enrolled in the Consumer-Driven Health Plans (Scads).
In contrast, the families who suffer from chronic illnesses and considered unhealthy are the ones that will choose to have preferred provider organizations (Pops) and health maintenance organizations (Homos) According McMullen, of the American Academy Of Pediatrics, (2014) “It is likely that this outcome will be an unfavorable selection causing the premiums and expenses due to the families who select Homos and Pops demographics. ” He went on to say that among those who choose a CHAD, over 30% or one-thirds of them have reported that they delayed or avoided healthcare, which is doubled the number of people who have an HOMO.
Moe than 5% of income is spent on out-of-pocket expenses for another 1/3 more of the people who choose CHAD (triple times the number of as HOMO). While 63% of those with Homos are satisfied, only a meager 42% of those with Scads are. Twenty-five percent or quarter of all who has the CHAD complained about not being satisfied with the plan they have, in comparison to only 8% of those who have an HOMO. Treatments that are less expensive are more likely to be chosen by patients who have CHAD. McMullen, 2014) Society will be affected by the increase of CHAD due to the fact that families will avoid appointment for their well and sick children. We may also likely see a vast increase in the number of chronic diseases as well as those that are preventable by vaccination. Possible increases in hospital; emergency rooms and medical expenses in general will be affected. Individuals with CHAD may also avoid diagnostic test thus the spread of chronic diseases, they may also refuse to fill prescriptions and may not follow through with medical referrals. This also may result in them using the cheapest clinics. McMullen, 2014) Recommendations According to the American Academy of Pediatrics, (PAP) Committee on Child Health Financing (COIF) and the Private Sector Advocacy Advisory Committee (ISAAC), “The issue has been addressed and determination has been made that Consumer-Driven Health Plans (Scads) are really conceivably dangerous and may cause harm to the health of children. ” (McMullen, 2014) I would therefore not recommend the CHAD for patients. Instead I will offer them health maintenance organizations (Homos); which will be more manageable for them financially.
This will allow them to take their children to their well and sick children appointment so that they can be vaccinated, thus avoiding the spread of communicable diseases. It will also reduce the numbers in chronic diseases for older children and adults once they follow up with their appropriate appointments as a child. Society will benefit in the future by not having Conclusion To reiterate, I really do not think that Consumer-Driven Health Plans (Scads) are effective for patients with chronic diseases. It will be too costly for the average individual to keep up with all their visits and medications.
It may prevent patients from going to specialists to whom they may be referred. Mostly employees in management or salaried positions are able to afford this type of plan. While some of these accounts such as HAS, HEAR, and FSP have their benefits, they also have disadvantages. For example, according to the Department of Treasury, (2014), “Health Saving Accounts (Has) like any other AIR or savings account do have fees which can sum up over a period of time. The cost of visits to the medical professionals and prescription bills can be a strain on anyone.