I Thought We Were Worried About Cost?
By Chris Aguiar of The Phia Group, LLC
Can anyone disagree with the notion of affordable healthcare? No matter where you sit on the political spectrum, I would imagine it would be difficult to vote against such an idea. Over the past few months, we have witnessed contentious debate on the most effective means to provide affordable healthcare for all. One of the main points of contention on that debate, as is always the case when dealing with political matters, is cost.
The Affordable Health Care for America Act has been billed as a fix for the ever-rising cost of health care in this country. The cost of reform has been estimated anywhere between $600 billion, and $1 trillion dollars, depending on which version of the bill is evaluated. Healthcare is an all-encompassing, multi faceted industry, including but not limited to, insurance. Despite the substantial effects of industry wide inefficiencies and underlying costs of administration, the insurance industry seems to be taking a brunt of the criticism.
With many wondering how we can possibly fund a move to ensuring health insurance coverage for all without adversely affecting access and quality of care; it is interesting that lawmakers are attempting to limit the rights of employee benefit plans. Federal and State Legislatures alike have been attempting to enact laws limiting the subrogation rights of plans across the country. In just the past few months, several states have proposed anti subrogation legislation. Several others have proposed bills that would substantially limit the amounts that a plan can claim as reimbursable based on whether a patient is fully compensated, and whether or not a plan has to participate in legal costs incurred in the plan participant’s pursuit of a settlement.
Why would these lawmakers, who purport to be so concerned with the cost of reform, limit a cost containment strategy that would enable employee based benefit plans to recover approximately $1 billon annually? Are they being honest with their constituents when they paint insurance companies as the big bad wolf of the health care world who is more concerned with profits than the welfare of their participants?
The answer to that question is undoubtedly, NO! Every penny that is recovered for self insured employee benefit plans is returned to the plan for use in the payment of future medical claims, not transferred to the paycheck of a high paid official. Those recoveries positively affect the cost of health insurance in this country. Anyone that argues that subrogation is unfair given the current system is simply being disingenuous and not looking out for the best interests of the industry as a whole.
Employee benefit plans, whether governed by Federal or State Law, need to remember that the subrogation industry is under attack, and will likely be for the foreseeable future. The only way to stay ahead in the war is to keep hammering home the message that this is an equitable process geared toward saving everyone money. At the same time, they need to continue to stay at the forefront of cost saving strategies. The ever-evolving legal landscape requires that plans constantly update their plan documents with up to date, innovative language reinforcing their discretionary authority and ability to not only be proactive in their full review of claims prior to payment, but also recover those payments through subrogation and other avenues when the situation allows. We here at The Phia Group, LLC pride ourselves on being at the forefront of these developing strategies and look forward to continuing our work with you in facilitating these efforts.
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