Tuesday, March 29, 2011

Consumer-directed Plans and Self-funding

Ooh, I like this topic as I believe in them both as long as the liabilities are fenced appropriately with specific stop-loss (think of that as a CAP on a specific employee or family's claims) and aggregate stop-loss (CAP on your entire company's spend)....and doing this with a health reimbursement arrangement owned by the company or employer. This is Shangri La for a guy like me but here is the catch, it requires experts like us guiding, coaching and analyzing for our clients as this is pretty complex stuff that requires expertize. And if done correctly can really be a better way than just giving health insurance carriers the premium dollars to make the margin (PROFIT) they want on your case. I liken this to a fully insured company of say 400 employees that DOES NOT self-fund but wants the power of a health reimbursement arrangement (it is the tool that can pay deductibles for employees and be written off as a business expense as well)...well here is the catch, the greedy underwriters at insurance companies will push for a certain amount of premium regardless of the plan design selected (with pricing matrices they will push the plan they want as they MUST get the premium they want regardless....they know they will have X in claims, then administrative costs, plus profit...so they corner clients).

So it is more of a challenge to fit an HRA in to a fully insured case where carriers have claims data they use "against" you, as well as manual rates (your age, gender, marital status, home zip code) that they blend....so they have 2 "shells" they use on the table and benefit from whichever one they want to use against you to fit you in to their profit box.

This topic I could go on and on, but in general if you shop with a competent broker like Health Insurance Geeks and Nexus, and drive their commissions (when was the last time you reviewed what your broker charge, versus what they delivered in PRICE?...forget all the B.S. services they say they provide, I am talking about premium coming DOWN rather than your broker selling you on the INCREASE!)....

Shady, greedy, self-serving brokers make us crazy here....we work our tails off for our clients on less commissions as we are not reporting to shareholders or dummy boards, hmm-hmm ooops let's call them unnecessary executives in the game of price....

I feel companies who are less than let's say 1,000 employees, should ALWAYS be with a boutique, otherwise they are paying for nonsense.

visit www.healthinsurancegeeks.com or www.nexusbenefits.com for more of our ideas.

Friday, March 25, 2011

Why the Copay is the Enemy and the Fat Farm of the Health Insurance Carriers

I liken it to drug addiction....in this country the smart folks up in the ivory towers in the world of health insurance knew 2 things...we would LOVE the copay, which we all do now, and that we were going to have a disaster on our hands in 20 yrs...that was back in the early 1990s and voila, here we are....

The copay is both the enemy and the problem, because it hides the cost of everything...if my doctor bills 1200 dollars for a 15 minute visit, but I pay a $25 copay what do I care? However, on the other hand, when my employer moves to a consumer-directed health plan with a high deductible (where I get billed the negotiated physician rates between him/her and my insurance carrier) now I get to see this full $1200 and the allowable amount.

As both an expert in this field, a business owner/entrepreneur and also a consumer, when we move to this model many years ago here at my company, I started BLOWING up my Pediatrician, PCP and also specialists...I remember the first time with my youngest daughter when the Pediatrician wrote 4 prescriptions for her...off to CVS we went and again VOILA, we were told the BRAND NAMES were a total of like 800-900 for the 4 meds, 30 day supplies....I started laughing....immediately called the Pediatrician and said "re-write those bad-boys with all generics"....my bill was like 60-70 for ALL 4 FOR 30 DAYS!!!

That sums it up folks....going to deductibles, negotiated pricing, NO COPAYS for anything, FREE PREVENTIVE MEDICINE, great tools for employers and communcation forums for employees, and we can get out of this mess....also I DO NOT NEED A MEDICAL DOCTOR, to see me to re-order my allergy medicine for another year, which has both been working, and that I have been taking effectively for over 10 yrs...welcome the NURSE PRACTITIONER, OR PHYSICIAN ASSISTANT (btw, tell your kids it is going to be the field to get in to in the next 5-50 yrs...essential to our healthcare success).

This topic, I could ramble for thousands of words right from my hip because I study it, practice it, live in it, believe in it, and have hundreds of clients with whom we have implemented it, and the phone calls on premium increases VANISH!

I hope this helps, and I love writing about this stuff. I would imagine health insurance carriers hate seeing this stuff, however they also know it works...Cigna, Aetna, United Healthcare, they have all had their own employees in these models for 10 or more years....the folks who really hate this are HOSPITALS and DOCTORS because to the scamming ones out there (billing on quantity not quality) they know their offices with Monet artwork are also going to need to become more efficient.

Wednesday, March 9, 2011

More on Healthcare Consumerism

Two great things happened today...one was with my co-founder and business partner and the other with one of my clients. First my business partner was explaining how one of his clients that he migrated to a consumer-directed high-deductible health plan strategy had just had an epiphany as they discovered together the cost of a brand name drug (an injectable) versus the generic substitute....it was for a 90 day supply and the brand was 2,000....YES, $2,000 bucks!!!! The generic substitute was $50 for a 90 day supply.

Now had we not moved this client to a non-copay based plan he would have never discovered this little nugget that is a great example of why a single rate for an employer health plan now is soaring closer to $1,000 than ever for what we call a "rich" plan design...funny thing is what we now call a "rich" plan design, back in 1997 we would have scoffed at vehemently...back then what we call rich now was probably 175 bucks a month for a single...now 14 yrs later it is closer to $1,000. Unreal and the reason is the example above...the DEVIL copay system that hides the costs of things.....

Second example was great...talking to a client of mine for 10 years and we have had a HOMERUN moving them from the DEVIL to a new world, through a consumer-directed model. She and I were going through this years' renewal and ideas on how to starve their insurance carrier this year and POOF!! We came up with a great analogy...health insurance needs to become more like auto insurance....deductibles...can you imagine if you had a $10 copay for a wreck in to a pole that could cost $10k...you would almost look for a pole to hit to make the others in the car laugh a little...who would even care, $10 bucks, why not! Now that is not how auto insurance works....$2500 deductible is pretty common to keep the premium down and as a result you would not catch me dead screwing around in a car and playing with POLES! Same deal in health insurance.....if we pay a larger cost of Rx especially, and doctor's visits and charges/lab xray too, we are going to SHOP WAY MORE and watch our dollars....a result as well will be a radical reduction in healthcare consumption etc...

Now finally one thing to highlight is the really sick in this country, the 15% or so....maybe those are the folks Obamanomics should focus on as they are the real problem no one talks about....they drive 80% of the claims and many times have the same 4 ailments that drive most claims anyway. In no way am I suggesting that they should get subpar care, but large consumers of the system and dollars need to pay their fare share, and that is where the government should both back-stop claims from insurance carriers/employers, while also pointing the VERY sick in to very efficient systems...like Mayo, Cleveland Clinic, etc....see this link

http://www.100tophospitals.com/

The true best hospitals in the U.S. should be rewarded for being such, and the poor ones should be shut down. We have too many....funny that NYC does not even have a top 25 system, which is simply appauling as its costs are 2-3 times other places in the U.S....this is the stuff these clowns in Washington need to work on.