As self-insurance market grows, health insurers adapt

As more employers turn to self-funded health insurance plans for flexibility and cost control, health insurance companies are tweaking their business models to adjust, according to Managed Care Magazine.

Self-funded plans are particularly popular among larger employers. Statistics show the percentage of employers with 5,000 or more employees that are self-insured has grown to 94 percent in 2015. Overall, 63 percent of employers are fully or partially self-insured, compared to 44 percent in 1999, the article says.

To keep up, traditional insurers are finding ways to access the self-insurance market. Insurance brokers have been a key cog in the wheel, connecting fully insurered carriers' administrative services only offerings to stop-loss insurance providers. The market for stop-loss has grown because of the Affordable Care Act's ban on annual or lifetime coverage limits, the article adds.

Previous research shows the growth in self-insurance has chipped away at commercial full-risk enrollment, leading some insurers to expand or launch their own private exchanges. Hospitals have been quick to adopt self-insurance plans, hoping to control premiums with personalized product offerings.

Experts say greater plan choices drive employers toward self-funded plans. Mike Ferguson, president of the Self-Insurance Institute of America, tells Managed Care Magazine that instead of purchasing prepackaged plans, employers can modify a plan to fit the needs of their employees. An employer with a large percentage of older employees may want to focus on chronic pain benefits, whereas an employer with a younger workforce might adapt the plan to cover family planning.

Self-insured companies also have access to more claims data, Ferguson says, allowing companies to deploy analytics in an effort to cut unnecessary costs.

To learn more:
- read the Managed Care Magazine article

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