What defines a Consumer-Driven Health Plan (CDHP)?

A Consumer-Driven Health Plan (CDHP) is defined by its structure that combines a high deductible with tax-advantaged accounts, such as Health Savings Accounts (HSAs) or Health Reimbursement Arrangements (HRAs). This format empowers consumers to take greater control over their healthcare expenses by allowing them to use the funds in these accounts to pay for medical expenses before their deductible is met, which encourages the use of cost-effective healthcare services and promotes informed decision-making regarding their health care costs.

The focus of CDHPs is to provide consumers with more flexibility and decision-making power in their healthcare choices while often resulting in reduced premiums. This approach aligns well with a shift towards more personalized healthcare, where individuals have financial incentives to make informed choices, ultimately aiming to increase consumer engagement in the healthcare process.