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.