Posted in Access to healthcare, Consumer-Driven Health Care, Defined Contribution Benefit Plans, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Employer-Sponsored Health Plans, Health Insurance, Healthcare financing, Independent Physicians, Medical Costs, Medical Practice Models, Policy Issues, Tax Policy, third-party payments, Uncategorized

Who Pays for Your Healthcare Matters

By Robert Nelson

Zero co-pays. No co-insurance. No surprise medical bills! Considering the inflated prices we pay for healthcare, who could pass up that deal, right?

Are the new generation of value-based employer-sponsored Direct Contracting Health Plans, which often include Direct Primary Care, a great deal and more efficient use of our healthcare dollars? Absolutely yes!

real-health-care-expenditures-and-third-party-largerBut we can’t lose sight of the economic reality that individuals always pay the cost of benefits, either directly or indirectly.  And linking benefits to employment has been a colossal policy mistake and the genesis of job-lock and our 3rd-party payer system, which has been the source of runaway costs for 50 years. As the graph illustrates, insurance (3rd party payer) is now a near surrogate for total healthcare costs!

Don’t be fooled. Within the modern paradigm of healthcare financing, employers don’t pay for our healthcare. Our healthcare expense, no matter how it is structured, IS part of our compensation and a huge portion of of it.

images-223535545945618981307.jpgFACT: Every dollar of tax-favored benefits paid by our employer reduces our take-home pay.

The beauty of Direct Primary Care is the portability (no job lock) and affordability which can exist independent of the size or benefit package of the employer. But the foundation which aligns the incentives is based on the identity of the customer. This is why we have to be careful to match the buyer with the recipient of care whenever possible. To insert another 3rd party, even the employer, undermines the sovereignty of the patient and the independence of the physician.

The supply side of healthcare has served the wrong customers for far too long. DPC should not make that same fatal error by exchanging its essence for a pipeline of patients.

This linkage highlights the importance of policy decisions regarding use of HSA funds; the importance of allowing HSA dollars to pay premiums AND DPC fees can’t be overstated.

For DPC, and Direct Contracting at-large, to dig us out from under the boot of the 3rd party apparatus it must remain accessible to the sole proprietor, independent contractor and very small businesses that don’t have “health plans.” And moving to defined contribution plans and away from defined benefit plans will help get us there.

third-party-2Getting first dollar decisions in hands of consumers will also be deflationary and spur competition; and essential to the goal of eventual portability & ownership of benefits. To do otherwise, with too much focus on a new & improved generation of employer-sponsored healthcare plans, will lead us right back to where we started.

Posted in Affordable Care Act (ObamaCare), Consumer-Driven Health Care, Defined Contribution Benefit Plans, Economic Issues, Employer-Sponsored Health Plans, Essential Benefits under the ACA, Free-Market, Health Insurance, Health Reimbursement Arrangement (HRA), Health Savings Accounts (HSA's), Individual Mandate, Individual Market, Insurance subsidies, Medical Costs, Patient Choice, Patient-centered Care, Policy Issues, Portable Insurance, Price Tansparency, Private Exchanges, Quality, Self-Insured Plans, Small group market, State-Run Insurance Exchanges, Subsidies, Uncategorized, Uninsured

KFF.org |Examining Private Exchanges in the Employer-Sponsored Insurance Market

Prepared by:
Alex Alvarado, Matthew Rae, Gary Claxton, and Larry Levitt
Kaiser Family Foundation

Separate from the ACA, so-called “private exchanges” have also started to emerge as an option for employers
providing coverage to their workers. These private exchanges do not provide access to premium subsidies like
the public exchanges, nor do they necessarily involve standardized coverage tiers. But, they do have the
potential to reshape the employer-sponsored health insurance, which covers 149 million people, or nearly 56%
of the U.S. non-elderly population. We conducted interviews with more than fifteen private health insurance
enrollment platforms, as well as several employers and health plans moving in this direction, to create a picture
of this quickly growing landscape. We identified ten of the platforms we interviewed as full private exchanges
(based on the definition described in the next section) and have profiled those in the appendix.

Many approaches are sold as “private
exchanges” since the concept is now in
vogue. In profiling these efforts, we have
sought to define what differentiates the
new, more competitive approaches
analogous to the ACA’s public exchanges
from the traditional technology platforms
that simply provide online enrollment.
Also, what we describe here as private
exchanges are targeted at employers,
which eliminates many of the “e-brokers”
selling directly to the individual market.
Characteristics that exemplify a private
exchange include:

Examining Private Exchanges in the Employer-Sponsored Insurance Market