1. The New Consumerism in Health Care
Why States Should Care
Anne K. Gauthier
Senior Consultant, State Coverage Initiatives
AcademyHealth

2. Consumer-Driven Health Care
Overview:
High deductible insurance plan
Personal account funded in various ways to pay for care
Gap between the annual amount put into the account
Internet-based decision support
Potential Benefits:
Consumer control over health care and financial decisions
Personalized information to facilitate decisions
Greater choice of providers
Incentives for consumers to control health care costs
Potential Drawbacks:
Adverse risk selection
Greater out-of-pocket costs for sicker and poorer consumers
Information not yet sophisticated enough on quality

3. The Many Names of CDHC
The labels, structure, and the corresponding incentives of CDHC may vary:
Consumer driven or consumer-centric health plans
Defined contribution health plans
Medical savings accounts (MSAs)
Health reimbursement accounts (HRAs)
But, the direction of change is consistent!
New Health Savings Accounts (HSA) allowances under the Medicare Modernization Act
Greater employee cost sharing in all forms (premiums, deductibles, and coinsurance) across all plans
States have had to contend with $200b in deficits over last 3 years ;collectively 40-50billion in next year – State’s had varying degrees of budget shortfalls – Most states budget gaps between 5-20% - 5 states had budget gap of more than 20%; 6 states less than 5%; 5 states 0

4. Today’s Session Consumer-Driven Health Care: A National Overview
(Tony Lo Sasso)
Challenges and benefits to implementation from the employer’s perspective
Definity case study
Reducing Health Insurance Costs for Small Business
(Bill Lindsay)
Benefit design issues in today’s health care environment
An introduction to MSAs, FSAs, HRAs, HSAs
Pressing Forward: Cuts, Coverage & Creativity
(Mila Kaufman)
Pros and cons of HSAs
Policy issues and implementation for states
States have had to contend with $200b in deficits over last 3 years ;collectively 40-50billion in next year – State’s had varying degrees of budget shortfalls – Most states budget gaps between 5-20% - 5 states had budget gap of more than 20%; 6 states less than 5%; 5 states 0

5. Questions to Consider
Will consumer-driven health care address the current health care crisis?
How will providers, employers and consumers react?
How will the Medicare Modernization Act change HSAs?
What is the trend for the future?
What do states need to watch?
States have had to contend with $200b in deficits over last 3 years ;collectively 40-50billion in next year – State’s had varying degrees of budget shortfalls – Most states budget gaps between 5-20% - 5 states had budget gap of more than 20%; 6 states less than 5%; 5 states 0