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Consumer Driven Health Plan (CDHP)

Last updated: September 1, 2020

What Does Consumer Driven Health Plan (CDHP) Mean?

A consumer driven health plan (CDHP) refers to a type of health insurance and benefits program introduced in 2001. The goal of these plans was to add a financial burden on consumers so that they would make more informed choices about their health care instead of over-utilizing services. The idea was that this would lower premiums and costs for insurance companies and self-funded insurers (large employers). CDHPs generally have high deductibles (several thousand per family member each year) and often include a tax deductible special savings account intended to help the consumer save to pay the high deductibles. This is the type of plan that the Affordable Care Act is built around.

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WorkplaceTesting Explains Consumer Driven Health Plan (CDHP)

While consumer driven health plans (CDHP) are sound in theory, the reality experienced by many consumers has been that doctors simply refuse to reveal costs of procedures or tell them that either they do the recommended procedure or get a new doctor. The idea that the consumer had the power to drive the health care received is being sorely tested and no widespread overall savings have been seen for either employers or consumers at this time.

For employers, the financial cutbacks associated with CDHP-specific health plans have afforded slight budget cost savings in some cases but the morale damage in the workforce and the costs of administering the health savings accounts has proved to be more of a negative affect than anticipated. Before the passage of the ACA, health insurers and employers were mostly beginnign to move back away from CDHPs in many cases.

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