The healthcare market in the US is rapidly changing and not always for the better. New regulations and ongoing consolidation of big players in the market mean healthcare costs continue to rise for employers and individuals. At the same time, it’s hard for those employers and individuals to clearly identify why those costs are increasing because of the lack of transparency in healthcare pricing.
But things are changing in positive ways, too. We’re seeing more individuals embrace a direct primary care model for healthcare and more companies embrace the self-funded model for health insurance. We’re also seeing an increase in advocacy for price transparency and more doctors and surgery centers offering fully transparent upfront pricing.
The self-insured model (also called a self-funded plan) is a great option for employers who want to take back control of their healthcare costs. In this model, the employer assumes the financial risk for providing health care benefits to employees, rather than paying premiums to a large health insurance company. Instead of paying a fixed premium to a health insurance company, the self-insured employer pays directly for the actual health claims of its employees.
In the self-funded model, the employer has much greater opportunity to customize the plan to meet the needs of their employees instead of paying more for a one-size-fits-all plan through a major insurance provider. The employer also controls the decisions on contracts with providers and provider networks.
Self-insured employers also have a choice in how they structure their pharmacy benefit, which is a significant factor in overall healthcare costs. In the traditional market, the insurance dictates the pharmacy benefit with no input from the employer, which often means higher costs for prescription drugs. With the right PBM in the self-funded market, employers can customize the prescription drug benefit that works best for their employees and their business.
If you’re exploring the self-funded model or have already made the switch, be sure to ask plenty of questions about the pharmacy benefits manager and opportunities to save on prescription drug costs. Even in the self-funded model, many employers don’t realize they have a choice when it comes to selecting a pharmacy benefits manager and customizing their prescription plan to fit the needs of their employees and their business.