Why Public Employers Need Direct Contracting Health Plans
Self-insured healthcare plans are a popular option for public agencies that need to cover employees, but wish to avoid working with a third-party administrator. In fact, the state of California counts 2.2 million public workers that are covered by self-funded insurance policies. And on a smaller scale, 3,579 California public agencies self-insure their worker’s compensation liabilities. You know the saying: As California goes, so goes the nation. If that’s true, then self-funded health plans are where the nation’s public employers are going.
As we have previously explained, Kaiser Permanente has released studies that show self-funded healthcare plans can save employers up to $700 per member per year. That’s an incredible savings for a large employer – specifically for a public agency, where hundreds of people may be on the payroll and the agency is obligated to monitor costs because of oversight and taxpayer concerns.
But while these self-insured health plans can be great, there are ways to make them even better. One of those ways is with the direct contracting health plan model. When there is a contract in place directly with the healthcare provider, employers have access to discussions with providers that just aren’t available in a traditional insurance model. In short, it’s easier to find out what you’re paying for and how much you’re paying for it because providers have a direct relationship with you – the employer. Not the insurance company, not a third-party administrator…but the agency that it is providing healthcare services to. In public sectors, that’s crucial – because as any public employer knows, the public is always paying attention to where the money goes.
Public employers that take advantage of both self-funded health plans and direct contracting simultaneously enjoy a more transparent relationship with healthcare providers. There’s less red tape, fewer layers of bureaucracy – in fact, there is little to no bureaucracy at all. Direct contracting is simple healthcare coverage, the way things should be. To learn more, contact GM&A for a free health plan checkup. We will be glad to explain more to you.
Direct Contracting: A Completely New Payment System in Healthcare
By now, many of us realize that the Affordable Care Act was simply a bandage applied to a healthcare coverage system that was already spiraling into failure. For all the work that was done in Washington, D.C. to pass it in 2009, the ACA was really nothing more than a “best we can do right now” initiative. In states like Colorado and Oregon, residents are torn between supporting proposed legislation that would allegedly cover everyone vs. deciding that the universal healthcare model at the federal level - the ACA, also known as Obamacare - is simply not working, and therefore it would not work at the state level either.
Maybe that’s the reason why many healthcare experts are currently advocating for a completely new payment system. They don’t always offer specifics, though, and that’s where we come in. GM&A has over a decade of success with the direct contracting system, an innovative healthcare payment model that always ensures the two most important healthcare goals are accomplished: 1.) patients get covered, and 2.) providers get paid. It’s not insurance, but it complements insurance services so that providers are paid upfront rather than reimbursed (unless a different customized plan is chosen; there are numerous options for health plan customization). It’s not government subsidized, but it is a system that employers can use to meet their newfound Obamacare obligations for covering employees while still remaining profitable.
Unlike the ACA, direct contracting gets the job done. It’s not a bandage; it’s a solution. It’s the “completely new payment system” that healthcare experts are advocating for. To learn more, contact GM&A to request a complimentary health plan consultation (also known as a health plan checkup). We will be glad to speak with you.
Single-Payer in Colorado? Subsidies vs. Direct Contracting
Voters in the state of Colorado will vote this November on a proposed amendment to the state’s constitution – one that would make Colorado the second state to complete its attempt at a single-payer, state-subsidized healthcare system. The proposed system, “Colorado Care,” would be operated solely by the state’s government and funded by its taxpayers.
The fiscal impact of such an endeavor, if it were to pass into law? Colorado Care would increase the state income tax to 14.63 percent, which includes a 6.67 percent tax on the total payroll of all employers and a 3.33 payroll tax on employees – and, an increase that is exempt from Colorado’s Taxpayer’s Bill of Rights law (in other words, residents would not be given the opportunity to approve any future tax increases related to Colorado Care that would inevitably incur). And if an (unlikely) surplus ever accumulated, taxpayers would not receive a refund.
Sounds like a raw deal for the residents of Colorado.
In fact, Vermont’s single-payer healthcare model is already showing signs of unsustainability. The state’s Green Mountain Care program already needs an additional $1.6 billion in new revenues to keep it going, and that’s just for a single year.
And we haven’t even begun to touch on the manner in which Colorado Care would seriously compromise the quality of healthcare in the state. At the state level, the best doctors will leave the Colorado in favor of states where they stand a chance of getting paid. It’s happening in Vermont now. At the federal level, Obamacare is setting America on a slippery slope course toward care healthcare rationing – and counties like Canada have been there for years. Single-payer systems don’t work when the single payer is the government; history has proven it.
A much better alternative is the direct contracting model, which involves private businesses employers or a local government agency employer such as school districts, cities and counties directly contracting with healthcare providers as part of their employee benefit packages. This isn’t single-payer; the employee will contribute, just as employees do in traditional coverage models. Regardless, it’s a far superior model to single-payer subsidies: better care, immediate cost adjustments when savings can be achieved, and of course, endless plan customizations. Which option sounds better to you? To learn more, contact GM&A for a free healthcare consultation.
Private Exchanges vs. Direct Contracting
Private exchanges have become a hot ticket in healthcare over the past few years, thanks to the Affordable Care Act making the “exchange” a household word. Unlike the ACA’s public exchanges, a private exchange is owned and managed by a private entity rather than a government agency. It is essentially a marketplace for selling healthcare plans; when an employer joins a private exchange, employees choose from the handful of insurance carriers that are authorized to participate. Employees may also be able to purchase extra coverage in a private exchange, including:
- Disability coverage
- Supplemental plans
- Long-term care insurance
The idea behind private exchanges is that they offer lower healthcare costs to the employer because they are set up to include defined contributions. They also are supposed to have fewer administration costs than traditional employer-sponsored plans; administrators are typically insurance agencies, private healthcare consultants or (in the case of self-insured employers) third-party administrators. And of course, proponents of the private exchange model say that they offer employees more health insurance options than other benefits models.
It sounds great, doesn’t it? But we have an even better option.
When it comes to top-notch healthcare benefits, direct contracting has all of these things and more. While most employers are still waiting to find out if they are saving any money by switching to a private exchange, GM&A is showing employers how they can start saving by 30% or more immediately by switching to direct contracting. We are also able to show employers that direct contracting offers truly consumer-driven care, because the private networks we form for our clients uses the claims data of the company’s own employees. It’s the best form of customized coverage available.
While private exchanges only hit the scene in 2009, GM&A has been providing direct contracting services for over a decade – so we have a proven model that employers can trust for the long-term. To learn more, contact us for a free health plan analysis.
Lowering Per-Member-Per-Month Healthcare Costs
Employers: When was the last time you thought about how much you pay every month to cover your employees? Here’s a slice of truth that might be hard to swallow: In 2015, U.S. employers paid an average of $486 per month for each covered employee. If you cover 10 employees, that’s $4,860 per month; if you cover 100 employees (as many of the companies that contact us for a health plan analysis do), that’s $48,600 per month. Staggering, isn’t it?
One of the questions we may hear from someone who sees that data is, “But that’s just the national average, right? The cost must be lower in my state.” Not necessarily. In the state of Texas, the per-member-per-month average is $478 per month – just $8 less than the national average. To find the average per-member-per-month cost figure for your state, use the Kaiser Family Foundation calculator – and prepare to be shocked at how much you are paying per month to cover each individual employee.
Now, here’s the good news: You don’t have to pay that much! With GM&A’s direct contracting health plan service, you can pay an average of $260 per-member-per-month. That’s it! Multiply that by your number of covered employees and see if you like that figure better!
Direct contracting slashes the per-member-per-month cost of covering employees by at least 30%, and it offers employers a customized network of providers that meet the needs of employees. This is the best possible way to insure your workforce with affordable healthcare. To start paying less now – per employee, per month, all year long – contact GM&A to request a free health plan analysis. We look forward to showing you more!