Self-Insurance Will Continue to Pick up Steam in the Mid-Atlantic as Healthcare Reform Takes Hold
MyHealthGuide Source: HealthLeaders-InterStudy, 6/24/2011, HL Article
Nashville, TN — HealthLeaders-InterStudy, a leading provider of managed care market intelligence, reports that employer groups of as few as 50 to 100 lives are considering self- insurance for their employees.
According to the recent Mid-Atlantic Health Plan Analysis, smaller employer groups are actively weighing whether to take on their employees’ medical risk in order to save money on insurance premiums. Those who choose to exit the fully insured market generally hire a health plan or third-party administrator to manage the health benefits.Stop-loss reinsurance products are stepping in to fill the void for small and medium-size companies looking to self insure, leading to more competition for health plans in that market segment, according to the report which covers the District of Columbia, Maryland, Pennsylvania and Virginia.
“Self-insurance is not just for large multi-state employers anymore. It’s now an option for the medium-sized employers who have been the bread-and-butter clients of the insurers,” said Paula Wade, market analyst with HealthLeaders-InterStudy. “Health plans are trying to win the self-insured business rather than letting the business go to third-party administrators. To do this, they have to demonstrate that their expertise in managing care, engaging providers and controlling cost will benefit the employer.”
Another calculation for insurers is the degree to which self-insured groups tend to purchase their drugs by contracting directly with PBMs rather than going through the health plans. This trend tends to strengthen PBMs and weaken health plans’ ability to win pricing concessions from drug marketers, according to the report.
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