Why Health Insurance Costs Keep Rising—And What's Really Broken in the System
Chris Moyer, President & CEO of ASR Health Benefits, reveals why healthcare costs continue their unsustainable climb and why most employers still don't understand their options for controlling them.
Vinny and Chris discuss the role of third-party administrators (TPAs) in self-funded health plans, explaining how TPAs handle claims processing, network contracting, and customer service for employers who choose to self-fund their benefits. Chris notes that approximately 75% of mid-sized and larger employers in the United States self-fund their health insurance, yet most employees remain unaware their benefits are self-funded.
The conversation explores why self-funding expertise remains uncommon among brokers and consultants, creating a significant market gap. They discuss the challenge of consultant training and how many are incentivized to stick with large insurance companies rather than providing strategic advice to clients. Chris and Vinny examine the lack of price transparency in healthcare, noting the irony that healthcare executives rarely focus on cost reduction despite its direct connection to insurance premiums.
Value-based care emerges as a potential solution—shifting from fee-for-service models to rewarding better health outcomes—though both agree it's not a complete answer. They acknowledge that addressing healthcare costs requires collective effort from all stakeholders, including insurance companies, hospitals, networks, and TPAs, but note significant lobbying efforts maintain the status quo.
The discussion concludes with the shifting dynamics between finance and HR functions in employer healthcare decisions. Chris predicts that over the next five years, employers will continue seeking incremental solutions to manage costs, though significant industry-wide changes remain uncertain.
Disclaimer: This content is for educational purposes only. Please discuss your specific situation with your health benefits administrator or insurance provider for personalized guidance.
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