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Consumer-Directed Health Plans

Consumer-directed healthcare is an approach to financing healthcare services wherein individuals are given fixed allowances with which they can purchase specified services. Most plans couple this with catastrophic coverage, usually with a high deductible. These plans often receive tax advantages. Variants may be termed medical savings accounts, health savings accounts, or flexible spending accounts. They have been employed in a number of countries, including the United States, Singapore, South Africa, and China. There are differences in terms of such details as who contributes (employer, employee, or both), the levels of deductibles and co-payments payable, which services can be purchased with these funds, and whether unused contributions can be carried over to subsequent years. Some models employ a “use it or lose it” approach, whereas others ...

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