Medium to Large size private-sector corporations are driving a trend toward more “self-insured” health plans, says a new report by the non-biased Employee Benefit Research Institute (EBRI). The cutoff size for companies achieving cost benefits from such pro active plans remains at about the 50 employee level according to Sam Barber a prominent lobbyist and consultant for Self-Insured companies.
There are three basic types of coverage currently being offered by corporate insurance planners
• A self-insured plan, where the employer assumes the financial risk related to health insurance with the help of risk assessors and actuarial consultants.
• A fully insured plan, in which a large insurance provider is brought in to assume full responsibility.
• A hybrid of the above plans whereby the employer bears the brunt of the insurance risk and employs a reinsurance agency for catastrophic events.
Historically self insurance has been a trend among large employers and corporations, and significant financial incentives are in place for them to consider such an option: Employers with subsidiaries in many states can provide a comprehensive uniform plan without being forced to adhere to individual state mandates as major insurance companies must. This has the effect of lowering overall administrative costs for these self-insured plans.
Subsequent to passing and implementing the Patient Protection and Affordable Care Act (PPACA), there has been speculation that an increasing number of smaller employers would opt for self-insurance as many of the components of the act place upward pressure on overall costs to insurers. This makes the self-insurance model increasingly attractive for smaller companies.
Where does medical tourism fit in?
With the ability to tailor benefits as they see fit employers are able to focus on providing the best quality care for the lowest price. Now medical travel must be considered as the quality of care in many cases has surpassed that of care provided in many major western countries. In many countries malpractice and litigiousness have created skyrocketing prices and in socialized countries, enormous, and sometimes life threatening delays.
There are several paradigms used by savvy self insured corporations and they tend to either extreme. However most benefit plans are a hybrid and contain something of both elements. The main question of these self insured employers is how to get the employee to overcome the trepidation of flying to a foreign country for treatment. In most cases this is a daunting idea. As the industry has evolved so have the paradigms involved. As the industry eased into offering medical travel as an option employers felt compelled to incentivize employees for care. Essentially paying them. Nowadays with increasing latitude to tailor the benefit plans offered coupled with a tight job market, employers are more likely to present it this way to the employee. “Our benefit plan will cover $10,000 for a hip replacement, now the cost is $40,000 so here are your options. One you can co pay the $30,000 or perhaps you might consider Costa Rica where we have a a relationship with a facilitator and the entire procedure can be done for around $10,000 with door to door service.
Medical tourism marketing consultants have a bright future helping employers understand the benefits of incorporating medical travel into their benefit plan. Industry experts estimate that fewer than 1% of self insured companies are using medical travel as a component, this is a statistic to watch.