Consumer Directed Health Plans
A Consumer Directed Health Plan is comprised of a variety of mechanisms for funding healthcare costs and thereby providing health care insurance to all the members under this plan. This is a health insurance plan that includes a Health Savings Account (HSA) or Health Reimbursement Account (HRA) component. Although the CDHPs were first introduced in the 90’s, only recently it has become popular among the people. CDHP is comprised of two components, which are a high deductible health insurance plan (HDHP) and the HSA or HRA. The HSA is a tax-free savings account, in which the member can save money for future medical needs. The two components must always be paired together to insure maximum benefit to the consumer.
A CDHP is advantageous if you really need the freedom of choosing your health care provider and your income level is enough to save a considerable amount each month to your HSA. But as it will take a few years for the plan to mature, if you fall ill before it materializes you will have a hard time paying up your medical bills as the plan will not be of any help unless you build up some funds in your HSA.