Many hospitals are adopting self-insurance plans, hoping to offer competitive pricing to small business owners, reports Fox Business. By creating personal insurance products, hospitals can offset the costs of rising premiums.
The percentage of companies that self-insure has grown steadily since 2006. In 2011, about 60 percent of Americans were covered by their employers' self-insured plans, FierceHealthPayer previously reported. And as the self-insurance market continues to rise, commercial full-risk insurance declines. Commercial full-risk enrollment fell from 80.5 million in 2011 to 78.5 million in 2012.
Hospitals are joining the self-insurance trend. In New Jersey, CentraState Healthcare System--a private, nonprofit community health organization--teamed up with the Affiliated Physicians and Employers Health to create an alternative self-insurance product. The plan will cost 15 percent and 17 percent less than market pricing for small businesses in the state, notes Fox Business.
The rising interest in self-insurance plans also is due to the employer mandate delay that requires every business with at least 50 or more workers to offer them coverage or face a fine of $2,000 per worker, per year, according to the article. So, these plans put financial risks on employers to provide their workers with benefits.
Another hospital to jump on board with a self-insured product is Community Hospital of Monterey Peninsula in California. "We used our own employees, with 5,000 members in the health plan," Laura Zehm, chief financial officer at the hospital, told Fox Business. "What has to work is a financial incentive for employees and individuals. Over the years, we have become better at engaging our own employees," she added.
By keeping employees healthy, the overall risk pool remains healthy, which keeps costs low for hospitals.
- here's the Fox Business article