As Some States Allow Obscure Healthcare Prices, Self-Insured Employers Pay Much More

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A new report from MyMedicalShopper shows that self-insured businesses and individuals may pay more for their healthcare compared to fully-insured consumers, often due to higher provider reimbursement rates negotiated by their insurance companies. The only way to combat such higher prices is with greater transparency regarding the true costs of healthcare.

Mark Galvin, CEO of MyMedicalShopper, discusses the differences between self-insured and fully-insured consumers in New Hampshire.

As businesses across the United States look for ways to trim healthcare costs, many turn to self-funding as a way to save money when providing health insurance to employees. And even though self-funding hasn’t caught on on a grand scale, third-party payers are ramping up efforts to recruit more businesses into this insurance model. However, in a startling new analysis from MyMedicalShopper, data suggests that self-insured businesses and individual consumers may pay substantially more for the same procedures at the same healthcare providers as compared to fully-insured individuals.(1) MyMedicalShopper, the industry-leading producer of medical price transparency tools, says that both employers and employees should push for greater transparency in healthcare costs in order to take back control of their healthcare spending.

In many cases, insurance companies negotiate reimbursement deals with healthcare providers which ultimately harm self-insured employers and individuals. In MyMedicalShopper’s recent analysis of the impact of self-funding on healthcare costs in the state of New Hampshire, evidence was found of higher negotiated reimbursement rates to healthcare providers when the consumer was self-insured:(2)

  • Evidence suggests that providers received 7.01% more financial reimbursement on average for an Anthem self-insured HMO plan consumer as compared to a fully-insured HMO plan.
  • The average provider reimbursement for a self-insured patient using Harvard Pilgrim Health Care’s (HPHC) HMO was 3.17% higher as compared to individuals using a fully-insured HPHC HMO plan.
  • Some employers using an insurance carrier’s administrative services only (ASO) contract may pay as much as 40% more—across all the same procedures at the same provider—than fully-insured counterparts under the same insurance carrier.

Most healthcare consumers have no idea how much reimbursement actually goes to providers, and most don’t realize that higher reimbursement rates mean higher premiums—which they have to pay. Because provider reimbursement rates vary so widely among different types of insurance plans, the only way to take control of healthcare spending is through the use of price transparency tools. Price transparency applications such as MyMedicalShopper help break down barriers that shield the industry from scrutiny by making the costs of medical procedures more widely known.

Mark Galvin, CEO of MyMedicalShopper, says, “We were shocked to discover the differences in pricing for self-insured vs. fully-insured businesses and individual consumers in New Hampshire. But this example certainly isn’t the only such case within the U.S. Putting price transparency tools into the hands of self-insured business owners and employees helps consumers make healthcare decisions based on realistic data, not obscure cost manipulation.”

For many small businesses, self-funding represents a substantial risk, and only about 13% of small businesses in the country have adopted this model.(2) Businesses that self-fund pay for employee healthcare claims from their own coffers, which can be devastating for a business if an employee needs medical care costing hundreds of thousands of dollars. Still, many insurance companies are pushing businesses to adopt this type of insurance as a way to save on their healthcare costs—and many of the Affordable Care Act mandates don’t apply to self-funded insurance plans, including the requirements known as “essential health benefits”.(2) Self-funding may seem like a good option at first glance, but employers can lose any possible financial benefits gained from leaving a fully-insured plan to these higher negotiated reimbursements rates for self-funded plans. Better price transparency helps protect consumers by helping them understand the true costs of their healthcare, so they can make more informed choices about their healthcare options.

MMS Analytics, Inc., dba MyMedicalShopperTM, is a big data company with big dreams for healthcare. Co-founder and CEO Mark Galvin gave rise to the company out of the need to provide consumers and companies which provide healthcare benefits to their employees with transparency—the leverage needed to make solid decisions on their healthcare and improve their quality of life. Consumers previously ignorant of price variations in procedures and testing can utilize real-time health insurance plan pricing information, making it possible to choose care based on price, quality and convenience. Experts document that as much as $1 trillion could be slashed annually from the cost of healthcare in the U.S. MyMedicalShopper’s goal is to transform the healthcare industry into a fair market for consumers. For more information, visit

(1)    MMS Analytics Report: Differential Contracted Reimbursement Rates for Self-Funded Groups versus Fully-Insured Groups. MMS Analytics, 2017, MMS Analytics Report: Differential Contracted Reimbursement Rates for Self-Funded Groups versus Fully-Insured Groups.
(2)    Meet The Future of Small-Business Health Insurance: Self-Funding. Forbes.
(3)    The Impact of Self-Funding on Healthcare Costs in the State of New Hampshire. MyMedicalShopper. White paper.

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Karla Jo Helms
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