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How Do Companies Choose Health Insurance?

Monday, November 30, 2020
Warren Olaya
How Do Companies Choose Health Insurance?

Why do employers select the health insurance carriers that they do? Most often, it is because of two reasons: access and discounts.

The prevailing logic is that if members have a network logo on their card, they will be able to access the doctor of their choice and their network will provide them (or the employer who is paying the bill) with the best deal.

  • But if you were a doctor, which would you rather have: a member’s insurance card or full cash payment at the time of service?
  • Would your practice be more efficient if you didn’t have to file insurance claims and then fight with the insurance carriers about how much you should be reimbursed?
  • Would your practice be more profitable if you didn’t have to employ an entire department to deal with carriers and chase down patients for their deductibles?  

The answers to these questions illustrate why it is definitely in a healthcare practice’s best interest to have full payment at the time of service. This is why if an employer pays for a member’s care upfront at the time of service, the savings are often far greater than they would be with any group health insurance discount.

So, if we agree that employers are able to maximize savings by paying for members’ care upfront, how do we incentivize members to be a part of the process?  Employees realize a $0 deductible when they participate with their employer in the process, in what is a true healthcare partnership.

Here is an example: Joe, a truck driver in Indianapolis, Indiana.

  • Joe needed a heart catheter. He called his health plan’s third-party administrator upon hearing this news.
  • The TPA contacted the facility and negotiated a full cash payment to be paid the day of the procedure.
  • Because Joe called ahead and worked with the plan administrator, Joe’s deductible was waived and he owed nothing after his procedure.

The cost to the plan?

It was 24% less than it would have been had it been run through a traditional insurance network plan…and those savings include covering Joe’s deductible.

So, what’s for you? 

It’s important to know that employees who use direct payment still need insurance plans to cover additional testing, procedures, or medications. The Horton Group can work with you to create a plan that will make your employees feel safe at an affordable rate. Contact us to arrange a consultation.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.