The Affordable Care act has doctors, businesses and individuals adapting to the widespread changes and hospitals are entering the provider game. Self-insurance plans are arising at hospitals that put financial risks on employers for providing benefits to their workers.
The ACA employer mandate, which has been delayed until 2015, requires each business with 50+ works to offer them coverage or face a penalty of $2,000 per worker, per year. The mandate has been delayed until 2016 for companies with 50-99 employees.
Hospitals believe they can offer competitive pricing as providers to small business owners predict higher premium costs in the upcoming years. Self-insured products are developed with employers pooling together to create large insurance pools and spreading the risk (and costs) across companies. CentraState Healthcare System, a private, nonprofit community health organization in Freehold, N.J., created its own insurance product this year.
[Small employers] were getting very large premium increases: between 20% and 40%,” says John Gribbin, CEO of the Freehold, N.J-based hospital. “We thought, ‘there has to be a solution to this.’”
The CentraState Community Health Plan is managed by QualCare Alliance Networksand the plan has been designed to offer competitive pricing: 15% and 17% lower than market pricing for small business group plan options in the state. The plan is aimed at service and retail businesses and independent physician practices, as well as hospital employees at CentraState.
The insurance game is changing and hospitals are adapting its own cost structure and business model as a result. The adoption of self-insurance products won’t be instantaneous but has the ability to help to help manage care and improve the overall health of the population.
Laura Zehm, chief financial officer of Community Hospital of Monterey Peninsula in California, which has been part of the self-insurance market for man years, says “the adoption of new ideas is always slow. We need to be leaders in our community.”
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