Employers choose to self-insure because it allows them to save the profit margin that an insurance company adds to its premium for a fully-insured plan. Ideally Aetna would want everyone to be on fully-insured plans to maximize its profits.
In fully-insured plans Aetna bears the actuarial/financial risk. In self-insured plans, employer pays Aetna a fixed administrative fees. Healthcare use by covered persons is paid for by the employer. Thus, Aetna doesn’t bear any financial risk due to higher claims. From short-term financial risk perspective, Aetna would be less worried about patients covered through self-insured plans going out of network to HVSC.
However, when a patient, either on self-insured or fully-insured plan, goes out of Aetna network to HVSC, the …show more content…
Roughly 60% of members at Aetna are in ASO plans. More than 3 in 5 U.S. companies are self-insured, and self-insurance is almost universal among large employers. About 91% of people in companies with 5,000 or more workers were in self-insured plans in 2014, according to the Kaiser Family Foundation. ASO contracts represent billions of dollars in annual revenue for Aetna. The Patient Protection and Affordable Care Act has made ASO plans a preferred option for many employers.
The increasing trend towards ASOs mean that insurers have to compete to gain share in this business. That means they have to find ways to appeal to employers and help them reduce costs and improve care.
b) Self-funded employers are demanding getting better value from their plans and they may switch to other ASOs if Aetna fails to provide the expected cost-savings. Insurers that will win in the ASO space are those who offer services demonstrating unique, long-term value by ensuring that every procedure charged for is
In fully-insured plans Aetna bears the actuarial/financial risk. In self-insured plans, employer pays Aetna a fixed administrative fees. Healthcare use by covered persons is paid for by the employer. Thus, Aetna doesn’t bear any financial risk due to higher claims. From short-term financial risk perspective, Aetna would be less worried about patients covered through self-insured plans going out of network to HVSC.
However, when a patient, either on self-insured or fully-insured plan, goes out of Aetna network to HVSC, the …show more content…
Roughly 60% of members at Aetna are in ASO plans. More than 3 in 5 U.S. companies are self-insured, and self-insurance is almost universal among large employers. About 91% of people in companies with 5,000 or more workers were in self-insured plans in 2014, according to the Kaiser Family Foundation. ASO contracts represent billions of dollars in annual revenue for Aetna. The Patient Protection and Affordable Care Act has made ASO plans a preferred option for many employers.
The increasing trend towards ASOs mean that insurers have to compete to gain share in this business. That means they have to find ways to appeal to employers and help them reduce costs and improve care.
b) Self-funded employers are demanding getting better value from their plans and they may switch to other ASOs if Aetna fails to provide the expected cost-savings. Insurers that will win in the ASO space are those who offer services demonstrating unique, long-term value by ensuring that every procedure charged for is