Insurance is a transfer of risk, you pay a premium for an insurance company to take on your future insurance risks. That said, we have seen premium sky-rocket over the last 20 years because there has been no governance on how and what medical care facilities/hospitals, and providers bill. And that number has become in many cases a 1000-2000% markup on top of the largest payor in the U.S., Medicare.
Though the ACA, or Obamacare for short, had very good intentions I’m sure, they did not deal with this side of the equation – the cost of services. They only addressed the need for insurance. So we’ve actually seen prices go dramatically even higher especially for the average American, as they are now paying for a guaranteed-issued system, where everyone gets the same price.
Guaranteed-issue simply means no medical underwriting (no questions, you pay, you get covered – whether you’re chronically ill or a triathlete you pay the same rate)….so if I’m the sick person I hate the cost of the ACA, but will pay what I must, because I’m sick…the triathlete, on the other hand, is furious. She sees no value in health insurance….”why pay $850/mos, or a 7 series BMW lease payment, for something I never, ever use….give me back my medically-underwritten pre-ACA/Obamacare plan that cost me $90/mos. On the other end, the very sick person will also complain about the cost because that’s what we do when we’re sick whether we have means or not. For simplicity sake, the ACA is collapsing because too many ill patients are consuming, and also getting premium subsidies and there are not enough healthy people paying into the system.
With the models we use at Navinsure we take a few, critical and different steps to combat the unpredictable, constantly rising cost of healthcare and health insurance:
- We use the power of a Captive – large risk pool of like-minded employers all helping each other with risk
- A compliant vehicle called a VEBA to fund benefits – not insurance, rather a tax-favored trust to pay for the costs of benefits, including Health & Rx benefits.
- Reference-based pricing – using the cost allowable via Medicare, blended with the “cost” filed with HHS by hospitals/facilities yearly, a viewable, acceptable cost many 100s of a percent lower than what is allowable in a traditional PPO, EPO, HMO plan
- TPAs (third-party administrators) rather than traditional insurance carriers – lower administrative costs, leaner organizations, and allow a completely customizable design for an employer than the “filed with the state” style fully-insured health insurance plans used by just about every one of the big insurance carriers in the U.S.