It’s time to step off the insurance escalator!

No matter who pays the bill (taxpayers, employers, citizens), the fact is health insurance rates will continue to rise. Even the Congressional Budget Office in D.C. projects an increase in health insurance rates over the next 20 years. What can an employer who wants to offer a health plan do? The answer is, step off the insurance escalator!

Employer sponsored health plans should move far away from the traditional model, where insurers are in total control. Now is the time to consider a funding model which puts the employer in the driver’s seat and enables the employer to truly control their level of risk. For some employers, this means moving away from an “ASO” arrangement with a health insurance company. For those employers still using a fully insured plan, it’s time to consider self-funded, partial self-funded, or hybrid arrangements. There are many self-funded options available at this time which are designed to minimize exposure.

Outside of the small group market (2-100 employees), the only financial value health insurers currently provide is their network discounts. Employers should only lease a health insurer’s network. To have a health insurer do more than this today no longer makes financial sense and is not sustainable.

escalator

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