Top Healthcare Cost Management Solutions
The skyrocketing cost of healthcare has had a significant impact on a variety of industries. With forecasts predicting an increase by 5% in 2022, many employers are looking for better methods of healthcare cost management.
An increasing number of companies have tested the waters of self-insured health plans. As enrollment in traditional insurance plans has declined, more people have joined the debate about which type of insurance is the best way to manage healthcare costs.
The domain of self-insured plans has typically belonged only to larger companies; however, this option has become increasingly viable for mid-sized and small businesses, as well. So, what are the differences between traditional insurance and self-insured plans? And why are so many employers looking at self-insured plans for healthcare cost management? Read on to learn more.
Healthcare Cost Management: Traditional vs. Self-Insured Plans
Employers are aware that quality healthcare coverage is one of the best benefits they can offer employees. In a competitive hiring market, ensuring access to quality healthcare can increase employee retention. It can also improve productivity when employees have fewer absences from work due to illness.
Traditional plans that employers purchase through insurance companies have long dominated the employment landscape. However, an increasing number of employers are adopting self-insured plans as a way to mitigate healthcare costs. Some key differences contribute to the switch. Let’s take a look:
Traditional Commercial Plans
These group plans allow employers to enroll their employees in a health insurance plan through a commercial insurer. The employer pays the cost through premiums, with whom they may cost-share with employees via co-pays. This is a relatively comfortable area for employers because it has become the most normalized method of coverage; few changes accompany enrollment in commercial plans.
Traditional commercial plans often come with annual price hikes, however. With the steadily rising price trends, it is becoming increasingly costly to maintain healthcare for many employers. In addition, traditional plans offer no refunds for unused care. Because the premiums are already paid, the health of the workforce has no effect on the price the employer pays for healthcare coverage.
With self-insured plans, the employer essentially cuts the middleman out of the healthcare coverage pipeline. Instead of paying an insurance provider a premium amount for coverage, the employer pays for services out-of-pocket. While this may seem that employers are taking on more risk, it really means that the employer can take all the rewards of better payments.
Because employers only pay for the services that are utilized, they benefit from a healthy workforce by paying for fewer services. But they also have more agency over the provider network and the way plans are designed. However, many employers do not have the access to negotiate lower prices.
6 Degrees Health: An Even Better Alternative
While switching to a self-funded plan can yield substantial benefits, it’s not a one-size-fits-all solution. However, working with 6 Degrees Health can help find the best way for your company to switch to a self-funded model. Our professional and clinical staff have the industry expertise to make a positive impact on your healthcare cost management.
6 Degrees Health has access to medical data claims that use Medicare payments as a baseline to negotiate costs. This means we can ensure that you receive the most reasonable prices for medical services. Our aggregate comparison method is the backbone of our reference-based pricing model. Furthermore, we educate brokers and TPAs every step of the way to help us carve out the best solutions on your behalf.
Our reference-based model can save you upwards of 40% on healthcare spend when you switch from a fully-insured to self-funded model. Ultimately, if you’re among the many employers looking for better healthcare cost management and considering a switch to a self-funded healthcare model, 6 Degrees Health has the expertise to guarantee you the maximum savings.
As a service-first healthcare cost-containment company, 6 Degrees Health helps employers and employees navigate healthcare protocols to pay what is fair. Speak to a representative today to find out how our reference-based pricing model can help you realize the true benefits of healthcare.
Looking To Lower Your Company Healthcare Coverage Cost?
As a service-first cost containment company, 6 Degrees Health is here to help employers and employees navigate a historically opaque healthcare system to pay only what is fair.