Why is Direct Contracting Good for the Employer?

It’s no secret that the Affordable Care Act (ACA) law has changed the way many employers look at the idea of providing medical coverage to their employees. In the aftermath of all the changes, some companies have opted to stop furnishing medical benefit packages altogether. That’s unfortunate, of course – but there’s good news. Direct contracting, the service that we offer here at GM&A, offers employers a way to continue delivering medical benefit plans to their employees; best of all, direct contracting can do this without making the employer’s health plan costs go up.

How is it done? In a word, competition. In the direct contracting model, providers contract directly with the employer rather than participating in an HMO. The providers can choose their own rates, charging whatever they feel is necessary in order to earn the business of companies. Consequently, many of those providers lower their costs significantly – because (you guessed it!) they know that lower costs are the way to earn the business of those companies. That means employers that choose the direct contracting model can still provide medical benefits, without worrying that the costs are going to skyrocket. Chances are, costs may actually go down!

Now, back to the Affordable Care Act. We all know that the law (which was passed in 2010 but took effect on January 1 of this year) requires companies to pay for more health care services and products than it did before. In fact, one company quite famously took that issue all the way to the Supreme Court recently. Direct contracting doesn’t change any of that; however, the lower cost of doing business with providers helps companies comply with the ACA law more affordably. Yes, the law puts more onus on what companies must cover – but with direct contracting, they can actually afford to comply.

To learn more about direct contracting and the advantages it offers employers, contact GM&A today. We will be glad to answer your questions during a complimentary employer health plan consultation. 

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For a Consultation and detailed Health Plan Analysis
Call Hurb VandenHoogen at (858) 775-9170
or email hvandenhoogen@gma-usa.com