With doughnut policies who fills the hole?

The big trend in health insurance this year is the Consumer Directed Health Plan (CDHP).

It is, in essence, a doughnut policy. (Picture from Scooter's Doughnut.Net.)

You're given so-called catastrophic coverage, in fact a ginormous deductible. Then you create a Health Savings Account (HSA), to which the company contributes, for your expected expenses.

Watson Wyatt and the National Business Group on Health say nearly half the companies they've surveyed currently offer doughnuts, and 15% of employees at companies offering them opt-in.

But that opt-in option may be disappearing:

Only 6 percent of companies report 100 percent enrollment in a CDHP, but that number is expected to rise to 9 percent in 2009.

What "100% enrollment" means, in fact, is that at a growing number of companies doughnuts are the only things on the menu.

Question becomes, who gets the hole?

The last time the health care debate involved doughnut holes was with Medicare Part D, the prescription drug coverage passed in 2004.

In this case, you get coverage to $2,200 on prescription drugs, then no coverage to $5,100, then you get coverage again.

Despite predictions this would be a horrible thing, seniors were happy with the coverage, because the size of the hole was predictable.

The size of this hole isn't.

I accept the argument. Risk is being moved here from the company to the policyholder.

But say you're diagnosed, as I was, with high blood pressure. Or with diabetes, as a neighbor was. Or something else requiring high-cost maintenance but doesn't kill you.

In the first year you're stuck. If you don't meet the deductible you're on the hook for the difference between what your HSA provides and what you owe. You have to swallow the hole.

Worse, you can no longer get out of the doughnut because any other insurer will say you now have a "pre-existing condition," meaning you're not coverable at all through conventional insurance.

Or you can go broke and get onto the taxpayer's dime in some way. Maybe you can get partial disability and stay in the workforce.

The point is that, while doughnut policies are great as insurance -- predictable risks with predictable costs -- they're only health care so long as you and yours don't get really sick.

If this is the alternative big business thinks it's going to bring to next year's big health care debates, the doughnut will last as long as a real one in front of Homer Simpson. (The Homer above is available as a life-sized cut-out from Hollywood Standups.)