Ep. 8 Chris Moyer: Why Self-Funding Is Just the Beginning

Why Health Insurance Costs Keep Rising—And What's Really Broken in the System

Chris Moyer, President & CEO of ASR Health Benefits, reveals why healthcare costs continue their unsustainable climb and why most employers still don't understand their options for controlling them.

Vinny and Chris discuss the role of third-party administrators (TPAs) in self-funded health plans, explaining how TPAs handle claims processing, network contracting, and customer service for employers who choose to self-fund their benefits. Chris notes that approximately 75% of mid-sized and larger employers in the United States self-fund their health insurance, yet most employees remain unaware their benefits are self-funded.

The conversation explores why self-funding expertise remains uncommon among brokers and consultants, creating a significant market gap. They discuss the challenge of consultant training and how many are incentivized to stick with large insurance companies rather than providing strategic advice to clients. Chris and Vinny examine the lack of price transparency in healthcare, noting the irony that healthcare executives rarely focus on cost reduction despite its direct connection to insurance premiums.

Value-based care emerges as a potential solution—shifting from fee-for-service models to rewarding better health outcomes—though both agree it's not a complete answer. They acknowledge that addressing healthcare costs requires collective effort from all stakeholders, including insurance companies, hospitals, networks, and TPAs, but note significant lobbying efforts maintain the status quo.

The discussion concludes with the shifting dynamics between finance and HR functions in employer healthcare decisions. Chris predicts that over the next five years, employers will continue seeking incremental solutions to manage costs, though significant industry-wide changes remain uncertain.

Disclaimer: This content is for educational purposes only. Please discuss your specific situation with your health benefits administrator or insurance provider for personalized guidance.

Transcript

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Welcome to the Clearly Beneficial podcast,

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the show where we rip off the Band-Aid and explore the future of healthcare,

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benefits,

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and the people driving innovation in the industry.

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This episode is brought to you by Health Next,

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the company leading the way in helping employers build enduring cultures of health

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and well-being,

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reducing medical cost trends,

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and increasing organizational performance.

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To learn more how they can help you, visit healthnext.com.

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And welcome to the Clearly Beneficial podcast.

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I'm Vinny Catalano, your host, and today I'm joined by

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You know, all I can say is one of my homies, Chris Moyer with ASR Health Benefits.

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Chris and I have known each other.

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We were just chatting probably about 15 years, if not more.

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And I remember he tried to recruit me once.

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So that was... He turned me down.

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Right?

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But Chris, thanks for being on the show.

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I appreciate you and your perspectives,

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and I can't wait for the audience to hear what you have to say about the state of

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healthcare.

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So for the audience's benefit,

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give us that 30-second background of where you've been in this industry and kind of

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what you're doing today.

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Sure.

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So first off, thanks for having me, Vinny.

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It's great to spend some time with you, and it's been great to know you for the last 15 years.

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you and I met in the California market and it felt like we were,

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what do they say,

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brothers from another mother because of kind of where we both grew up.

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So yeah, a little bit about me and my background.

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I am the president of ASR Health Benefits.

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So we're a regional TPA located in Grand Rapids, Michigan.

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I've been with ASR for a little over two years.

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Previous 30

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One years was with a different TPA.

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So I am a TPA person through and through.

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I am super passionate about the TPA business.

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I definitely see a lot of excitement in this market for TPA business,

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especially with fully insured rates going up and excited about what the future

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holds.

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Great.

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Excellent, Chris.

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So for the benefit of the audience, I want to make sure we define what TPA is, right?

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So TPA stands for third-party administrator,

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and those are organizations that are the,

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let's call them the hub of a health plan for large self-funded or mid-sized

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self-funded organizations.

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Everything runs through that TPA, all the claims, all the network.

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The TPA is the backbone of a self-funded plan.

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Would that be a fair statement, Chris?

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It definitely is a fair statement.

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And, you know, the TPA services historically, at least when I was growing up in this industry,

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was really looked at as kind of that back room or back office work, right?

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So you get a midsize or a large employer,

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let's say they're,

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I don't know,

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a car dealership,

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and they want to self-fund their benefits.

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Well,

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they don't have the expertise to process claims and contract with a network and

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handle customer service because their business is about selling cars,

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right?

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So they go out and they hire a third party to administer their benefits.

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And that's really what

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a TPA is it's a third-party administrator that administers those benefits.

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But a lot of people,

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it's very interesting,

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a lot of people,

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I would say most individuals,

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most employees,

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and probably even barely the companies who are your clients,

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barely know who you are,

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right?

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I mean, they know the network that they go to, if it's a blues network or a network that

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provide to them.

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They know the network.

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The network's probably on the card.

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But a lot of employees don't really know who the TPA is that's running the plan, right?

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That's absolutely true.

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And as a matter of fact,

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the common misconception is most employees would refer to us as their insurance

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company.

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Oh my gosh, I hate that ASR.

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They're a terrible insurance company.

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When it turns out, we're not an insurance company.

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We simply are a facilitator or an administrator

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for the insurance company which is the employer ironically enough most employers

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that go that decide to self-fund their medical benefits they don't tell their

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employees that they're self-funded and they don't historically because they there's

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a fear that they're gonna feel like maybe they're being discriminated against like

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if something's not covered

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They have that feeling that maybe their employees going to feel some sort of a way

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about why isn't this benefit covered for me?

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Is it something I did wrong as an employee?

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Does my employer not like me?

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That's farthest from the truth,

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but that's the conception,

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the misconception that most members of employer groups feel.

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So oftentimes they have no idea that their employer is self-funded,

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that their benefits are self-funded.

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They just know that they have a place to call.

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when they have a question about their claim.

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So that,

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that raises a really,

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really interesting question that not even a question,

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it's more of an observation that,

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you know,

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most large,

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most midsize to large entities and enterprise level entities are all self-funded.

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I mean,

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I don't know what,

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in California,

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I know it's,

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it's a different market because of,

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of our,

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our HMO state and Kaiser and,

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and we can talk about that on almost a whole other episode,

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but,

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But I would say in most of the United States,

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correct me if I'm wrong on this statement,

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but in most of the United States,

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most,

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and I say most,

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75% or more mid-sized employers and larger usually self-fund their health insurance

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contracts.

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Is that a fair statement?

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It is.

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I mean,

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I think the percentages vary depending on the geography of where the employers are

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located throughout the country.

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But generally speaking, yes.

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I think that bears fruit from the benefit that I think is the most well-known to be

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self-funded,

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and that's workers' compensation,

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right?

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So workers' comp, almost all employers self-fund that benefit.

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Why?

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Because it generally performs very, very well.

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So it's practical to say,

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well,

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if you can do it in workers' comp,

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why not look to do it for your medical benefits?

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And then the first question you get,

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and I think you've probably faced this in your years of being a consultant,

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is,

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oh,

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I'm too small to self-fund.

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Oh, I can't afford to pay a million-dollar claim.

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Well,

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that's why there's levers that can be pulled to help to mitigate and manage that

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risk,

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whether it's stop loss or joining a captive or

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other ways to share that risk.

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So I think as employers are looking for more and more solutions because fully

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insured pricing has skyrocketed in the last couple of years,

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there's more and more employers that are actually looking to self-fund and are

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asking their consultants to tell me more.

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Tell me more about how that works.

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Tell me more about why that would be a fit for me.

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Tell me more about what are the pitfalls of self-funding?

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What are the advantages of self-funding?

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And the irony is there's not a whole lot of consultants and brokers that have that

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expertise,

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right?

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So that was, boy, we're going to go there fast, buddy.

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That really sets those brokers up,

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those consultants up that have that expertise to create a wedge in the marketplace

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because so many consultants and brokers over the years have gotten into the pattern

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of almost being dependent brokers.

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Well, let's go there.

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I mean, since I spent 20 years, 22 years doing that job, I couldn't agree with you more.

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I mean, I think in California, the lack of self-funding is directly proportional to the lack of

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employee benefits, brokers, and consultants that actually understand self-funding.

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I think you saw this when you were out here and your colleagues were talking to brokers.

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That, I think, is one of the main knowledge gaps of the brokerage community.

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I could say, again, talking about my own geography here in California, is that

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Because in my mind,

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you're not selling the fully constructed Lamborghini,

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you're building the Lamborghini piece by piece in a self-funded.

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And there's a lot of moving parts.

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And within each of at least certainly the major brokerages, there's centers of excellence.

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And there are people who understand self-funding incredibly well.

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But once you move down market, it's it's, I think, tougher and tougher to find those people.

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And these are the ones these are the primary people who are out there advising

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clients on what to do.

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And it's it's a big challenge and an opportunity for the market, right?

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It is.

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And I think a lot of the reason that those consultants and brokers,

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especially when you when you take one step down for maybe those those

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top tiers that have their own centers of excellence is that's where they were

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brought up in this market,

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right?

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They were brought up in this market of,

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well,

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you got the blues and you've got Kaiser and you got Anthem and you got,

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you know,

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the book of companies and that's the easy button.

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You just renew.

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And if you get a bad increase,

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then you go shop to one of the other book of companies and that's what you do.

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And then depending on how they're structured,

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they may actually get a raise every year just as the premium goes up.

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If their commission is tied to a percentage of the premium.

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So they were actually disincented perhaps from learning more about that and being

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that strategic advisor to the customer,

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to the client.

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That's where I think there's been more of a movement for the TPA to fill that gap

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as well and to play some of that role is to help not only the customer,

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but the consultant to understand what some of the advantages are of being

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self-funded

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However, sometimes that's portrayed as self-serving, right?

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Well, of course, the TPA is going to talk about why it's great to self-fund.

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That's what they do.

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That's their model.

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But I guess I would argue from a consultant's perspective,

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you're being paid to provide advice to the customer.

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Whatever that advice is,

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whether it's to stay fully insured,

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whether it's to be self-funded,

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whether it's to be level funded,

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whatever that is,

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you're

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paid to give advice,

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not necessarily to say,

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well,

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the Blues,

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I have a great retention bonus with the Blues.

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I better keep the majority of my cases with them or else it impacts my overall bonus.

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At that point, I look at those consultants more as dependent.

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They're dependent on the Buka companies, the Blues, the United's, the Cygnus, and the Aetna's.

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and their overrides and their bonuses,

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as opposed to serving the customer,

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which is what's in the best interest of the customer.

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I know for sure everybody, but that applies to.

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No, for sure.

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And I think part of the challenge is, you know, who's training these consultants, right?

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I mean,

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I look at,

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I look at my,

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my upbringing in the benefits business,

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you know,

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22 years ago where,

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you know,

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it was,

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you know,

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I was started in the small group market,

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all fully insured.

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Um,

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you know,

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as I,

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as I started going after larger clients,

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the appetite again,

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for them to be self-insured,

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um,

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was,

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was thin.

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Um,

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but at the same time,

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one of my,

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one of the,

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the,

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the company I spent the longest time with,

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they came out with something,

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you know,

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where every consultant had to be trained on self-funding.

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And then we had to pass a test with a score of 90% or better.

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if we actually wanted to talk to clients about self-funding i guess there was an

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eno claim that had come down the pipe and um that was enough of an eno claim to

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force that particular brokerage to um jump in and train all their producers on

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self-funding um now it wasn't it wasn't it was enough to make you dangerous it

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wasn't enough to make you an expert

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but at least it gave you the tools and the resources and the nowhere to goes to find out more.

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And I'd say you're lucky.

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You're lucky because you were at an employer that was able to offer that,

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because I think that's wonderful.

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Whether or not it was because of an E&O claim or not, I think that's wonderful.

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I think when you take a step down or two into the

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I don't know, I'd say maybe the mid-level broker, and that's probably a bad name.

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That's not what I'm trying to get to.

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They just may not have enough resources to pull that together.

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So they might either pivot away and say,

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we're just not going to focus on self-funding or possibly give the wrong advice

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because they just don't know what they don't know.

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Yep, yep.

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So let's let's pivot a little bit and talk about the state of health insurance today.

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Right.

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I know it's looking and tracking the data over time and looking at what sort of

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we've gotten to that point where a fully insured equivalent premium is about,

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you know,

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a thousand bucks a month for a single and pushing,

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you know,

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thirty five hundred or more for a family.

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health insurance has never been number one in the headlines more,

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talked about on LinkedIn more.

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And I'm happy that at least the conversation is coming to light more that people

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are interested,

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the news media is interested about it.

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But funny thing is,

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is that,

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you know,

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with all the pontification,

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with all the media talking about it,

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you know,

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with all the very,

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very,

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very smart people who are bringing up the issue,

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In my mind, not a lot of people still understand what goes on under the hood, right?

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And so we're at a point where it's becoming a crisis.

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So talk to me about your impression of that.

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Are you seeing what I'm seeing or am I wrong or what's your impression of the state

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of health insurance?

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No, I see it exactly the same way you see it.

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the costs are beyond unsustainable they're beyond ridiculous um where i sit today

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this is just my personal opinion is i have fatigue and hearing about how broken the

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system is how costly the system is i mean i've been hearing that over and over and

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over again and i read about it and i go to industry trade shows and that's all we

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talk about um i'm sad to say

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I don't have a solution to fix it.

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And I don't know that there is a one-size-fits-all fix to it.

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It probably needs to be stripped down to its bare roots and re-looked at again.

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I would tell you,

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in my opinion,

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one of the biggest things we could do,

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again,

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strictly my opinion,

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is have ironclad,

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held to accountability standards,

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transparency.

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you got to be able to see what the heck the prices are for these things.

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I mean, think about everything you do in your life.

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You go, you know, your car insurance comes up for renewal.

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My guess is you're not just accepting it.

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My guess is you're shopping.

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And before you say,

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I'm going to buy this company,

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you know exactly what it's going to cost you,

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right?

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For that policy and that type of thing.

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Go to the grocery store.

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You could pick

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You could pick Coca-Cola or you could pick the store brand.

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You could see the price difference and you could make a decision on what you want.

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Yet there is no price transparency.

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No matter how much transparency and coverage came out,

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no matter how much the CAA came out,

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none of those things are really driving that needle.

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That to me is absolutely key to understand what the cost is and then really put the

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power in the hands of

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consumer to figure out how to shop everything well it's really funny you know back

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in let's let's go back 2006 right when hsas first came out on the market consumer

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directed health plans right oh we were going to put the put the power in the hands

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of the consumer and give them high deductibles and lower the premiums and let them

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shop um but to your point how can you shop for something where you don't know the

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price

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um what's interesting is you know so someone posted a a a chart yesterday um that I

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saw on LinkedIn which was you know the cost and I had done this analysis years ago

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I mean basically when you you start in 2003 when I started in the industry with a a

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fully insured premium of 150 bucks a single and 450 a family right

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and then you add 9% every year over the last 20 years, you get to $1,000 a single.

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I said, listen, everybody wants to blame the evil insurance companies.

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The irony is that sometimes it's not really an insurance company that's in play.

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It's their network or you have a third-party administrator administering, right?

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But I mean,

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I put it back and I'll certainly take the heat on this is that,

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you know,

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I've gone to any number of health care conferences and I'll see the CEO of a health

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system get up there and they talk about their quality ratings.

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They talk about the research.

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They talk about the new machines they have.

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They talk about the new hospital they're building, the new wing they're building.

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but never have I heard a hospital executive say,

(00:18:47):
you know,

(00:18:48):
I'm gonna lower costs 10% this year,

(00:18:50):
or even,

(00:18:51):
not even that,

(00:18:52):
I'm gonna keep costs flat this year,

(00:18:55):
right?

(00:18:56):
So if we can't keep costs flat on the delivery side, how do you keep insurance in check?

(00:19:04):
Because most people I don't think make the connection between the cost of care and

(00:19:08):
the cost of insurance,

(00:19:09):
fair enough?

(00:19:11):
Yeah, I think that's absolutely fair.

(00:19:14):
I would say that I do think that an ASR ultimately is owned by a very large health

(00:19:21):
system in a hospital system in Michigan.

(00:19:25):
And they do spend a lot of time

(00:19:27):
trying to figure out how to hold the cost of care neutral or to lower that cost of care.

(00:19:33):
One of the things that I definitely see as making strides in the marketplace is

(00:19:41):
around value-based care.

(00:19:43):
And it's kind of a little bit of an elimination of the fee-for-service model,

(00:19:49):
where there's just an incentive to

(00:19:53):
just to do more so that you could charge more, so that you could spend more, right?

(00:19:56):
So in a value-based arrangement, you're looking at reducing hospital admissions.

(00:20:02):
You're looking at more of that patient at the center of the entire care journey.

(00:20:09):
You're looking at having better coordination between the disparate providers to

(00:20:16):
really help to manage that care.

(00:20:18):
And then there's a risk component at that, that the providers have to manage to a certain risk

(00:20:23):
Manage to certain outcomes, right?

(00:20:25):
So it changes that dynamic.

(00:20:28):
Do I think it's the end all be all in our industry?

(00:20:33):
No,

(00:20:34):
but it's substantially better than a fee for service and tries to get at some of

(00:20:40):
the root cause of what's out there.

(00:20:42):
At the end of the day,

(00:20:44):
there isn't one entity,

(00:20:47):
in my opinion,

(00:20:47):
that's responsible for where we are now.

(00:20:50):
Certainly not insurance companies.

(00:20:51):
It's certainly not hospitals.

(00:20:53):
It's certainly not networks.

(00:20:54):
It's certainly not TPAs.

(00:20:56):
I mean, it's everybody, right?

(00:20:58):
It's everybody plays a role in that collectively together,

(00:21:03):
which is why I think we all have to play a role collectively to get us out of this

(00:21:08):
as well.

(00:21:09):
But the challenge is there's a lot of money in it, especially on the pharmacy side, right?

(00:21:13):
There's a lot of money in it.

(00:21:15):
And that money goes to a lot of lobbying efforts that kind of keep us at the status

(00:21:19):
quo at times.

(00:21:20):
You know, and so, no, I hear all of that.

(00:21:23):
So one of my previous guests, Judy Kunish, wrote this book called The Center of the Star.

(00:21:30):
And it was all about the five points,

(00:21:34):
you know,

(00:21:35):
payers,

(00:21:35):
providers,

(00:21:36):
the medical industrial complex,

(00:21:38):
you know,

(00:21:39):
the consumers,

(00:21:40):
you know,

(00:21:40):
everybody who's involved in the system.

(00:21:43):
And to your point,

(00:21:44):
everybody does play a role because even as consumers,

(00:21:46):
we have to be mindful of our own health so we don't become patients,

(00:21:50):
you know,

(00:21:51):
in a sense,

(00:21:52):
you know.

(00:21:53):
And so the impression that's left with me is that I've never seen the thing where

(00:22:02):
there are truly the best minds in this country

(00:22:06):
have an opinion on, but no one has the solution, right?

(00:22:11):
Everybody wants to complain about the thing,

(00:22:15):
but no one wants to say,

(00:22:18):
well,

(00:22:18):
I think we should do this,

(00:22:20):
this,

(00:22:20):
and this.

(00:22:21):
And when they do come up with a solution,

(00:22:25):
those are the non-operational,

(00:22:26):
non-practical ones that they're suggesting,

(00:22:30):
you know?

(00:22:31):
And so you'd send something a few minutes ago about, you know, stripping it all back and

(00:22:36):
I feel like,

(00:22:42):
and this is not an opinion,

(00:22:44):
this is more of a topic of conversation,

(00:22:47):
is Medicare functions.

(00:22:50):
Why doesn't Medicare function for everybody?

(00:22:52):
Why can't we let Medicare function for everybody?

(00:22:56):
Yeah,

(00:22:56):
well,

(00:22:58):
ironically enough,

(00:22:58):
there's people that have been way smarter than me that have said,

(00:23:02):
we have the best PPO network in the country,

(00:23:04):
it's Medicare.

(00:23:05):
price everything to medicare get rid of all of the pepm fees to have network access

(00:23:12):
so that by the way everybody would have access to the same 97 of all the providers

(00:23:17):
anyway which medicare would would satisfy that um but i've been hearing about that

(00:23:23):
since before hsa's came out in 2006 yeah here we are we're no

(00:23:30):
Closer to that.

(00:23:31):
And look,

(00:23:32):
Vinny,

(00:23:32):
I'm not sure that that would solve it either because I don't think that there's one

(00:23:37):
solve.

(00:23:38):
I think there's a lot of different levers that have to be pulled to be able to change that.

(00:23:43):
I mean, you know, when I first started in this business, there was no such thing as a PPL.

(00:23:50):
It was traditional indemnity care, right?

(00:23:53):
It was deductible, major medical, right?

(00:23:56):
And you went anywhere you went and that's the way it was.

(00:24:00):
I'm not saying I would solve it either.

(00:24:02):
But, you know, we were supposed to have a solve for HSAs in 2006.

(00:24:08):
And candidly,

(00:24:09):
we probably were on to something if we would have posted prices at the same time

(00:24:14):
and said,

(00:24:15):
look,

(00:24:16):
Vinny,

(00:24:16):
you have a thousand dollar deductible or a fifteen hundred dollar deductible.

(00:24:20):
You are used to having just a five dollar copay.

(00:24:22):
Now you have a thousand dollar deductible.

(00:24:25):
Oh, but here's the pricing for all of these procedures.

(00:24:28):
So when you want to go and your money, you figure out where to go.

(00:24:32):
Would that solve it?

(00:24:33):
No,

(00:24:33):
but that would certainly be a great start because people will be stewards of their

(00:24:37):
dollar if we make it easy.

(00:24:40):
Yeah.

(00:24:41):
And there are some interesting solutions in the market out there.

(00:24:46):
I don't name them,

(00:24:46):
but I mean,

(00:24:47):
I know there's a company that,

(00:24:48):
you know,

(00:24:49):
of all the sort of point solutions that came out in the last five years,

(00:24:53):
I mean,

(00:24:53):
one that

(00:24:54):
You know, they've analyzed the data.

(00:24:56):
They take the health plan.

(00:24:58):
I know you'll know who I'm talking about.

(00:25:00):
You know, they wrap an HRA, health reimbursement arrangement around the plan.

(00:25:04):
And then if you need a hip or you need a knee or you need whatever,

(00:25:07):
you know,

(00:25:08):
whatever you're diagnosed with,

(00:25:10):
they will find the highest quality,

(00:25:12):
lowest cost provider in your community.

(00:25:15):
And if you go to that doctor that they recommend,

(00:25:19):
you won't have any out-of-pocket costs you know and and so that that's one and i

(00:25:24):
see i know some large enterprises have have adopted this model and it's it's not

(00:25:29):
even about lower to me it's it's not even about lowering costs anymore it's about

(00:25:35):
flattening costs we know where we are we it'll be it'll be a fool's errand to say

(00:25:41):
well we're going to cut prices by 25 well well we have to like say okay we know

(00:25:46):
we're at today we have to not

(00:25:49):
be 10 more next year i mean here in in the small group market in california one

(00:25:53):
local insurance hmo reached out a 23 rating you know i mean you know in the old

(00:26:01):
days when when you know you put 10 on a on a 150 rate the rates went up you know 15

(00:26:09):
bucks a year now you put 10 on a thousand dollar rate that's a hundred bucks a

(00:26:15):
month it's a big it's a big big difference and

(00:26:19):
We're seeing that not only in our market in Michigan,

(00:26:22):
but we're seeing it in other markets as well,

(00:26:24):
that the average rate increase from the fully insured is 20% plus,

(00:26:30):
right?

(00:26:31):
That's average.

(00:26:32):
And that's, again, it goes back to what we said earlier.

(00:26:36):
It's just not sustainable.

(00:26:37):
But I'm tired of hearing that it's not sustainable without having a solution to

(00:26:42):
make it sustainable.

(00:26:43):
And, you know, like I had said, there's people that are far smarter than me

(00:26:48):
that still haven't been able to solve this either.

(00:26:51):
So I think we have great industry trade shows.

(00:26:56):
We have great people that are really engaged in making a difference and getting it changed.

(00:27:01):
I think their voices are starting to really pick up.

(00:27:04):
And I think,

(00:27:05):
you know,

(00:27:05):
a lot of the same folks that I'm referring to,

(00:27:07):
because we follow them on LinkedIn there,

(00:27:10):
that's starting to have a bigger and bigger following.

(00:27:12):
And,

(00:27:14):
You know, that's where I think that's where it starts, right?

(00:27:17):
It starts when the employers say enough's enough and that voice is loud enough that

(00:27:21):
people finally come together and say,

(00:27:24):
we have to do something different.

(00:27:25):
Well,

(00:27:26):
that's the perfect segue to the last segment I wanted to talk to you about,

(00:27:30):
which is,

(00:27:30):
you know,

(00:27:32):
What's an employer to do?

(00:27:34):
And you and I,

(00:27:35):
before we started recording today,

(00:27:36):
we kind of talked about the push-pull between the finance function and the HR

(00:27:42):
function.

(00:27:42):
And I feel like, I did a presentation a few years back to a group of CFOs and

(00:27:51):
And I said,

(00:27:51):
let me throw a model out there and let me see if this is something that is the way

(00:27:54):
it goes,

(00:27:55):
right?

(00:27:55):
Broker comes in, presents to the HR person.

(00:27:58):
HR person remembers 5% of what that broker told them,

(00:28:01):
tells you,

(00:28:02):
the CFO,

(00:28:02):
about what's happening.

(00:28:04):
And the bottom line is you say, well, if the rates are like 5% increase, let's pop a bottle.

(00:28:10):
If the rates are 10%, you don't like it, but you've budgeted 10%.

(00:28:17):
And if the rates are 15% or more, something's got to happen.

(00:28:20):
We've got to change something.

(00:28:22):
And they all looked at me and they said, absolutely.

(00:28:24):
And so to me,

(00:28:28):
My challenge to that conversation is why are you budgeting 10%?

(00:28:33):
Why is 10% the okay number?

(00:28:36):
You just let this happen.

(00:28:38):
And so I think if we,

(00:28:41):
and you said this earlier,

(00:28:43):
get the C-suite and HR and everybody at the table to look at this as objectively as

(00:28:51):
possible,

(00:28:54):
and you draw that line in the sand with your consultant,

(00:28:57):
with your insurance partners,

(00:28:59):
with people,

(00:29:00):
I think if more employers begin to do that,

(00:29:05):
that will start to move the needle.

(00:29:07):
But I always jokingly say, who's an employer to yell at?

(00:29:10):
Who are they going to yell at?

(00:29:12):
But more employers have to be willing to do that,

(00:29:16):
or it's going to take some large employers in America to literally drop coverage

(00:29:21):
entirely,

(00:29:22):
pay the penalty to the ACA,

(00:29:24):
and then give everybody an ICRA.

(00:29:28):
Yeah, and I just, I don't see that happening.

(00:29:31):
I mean, that certainly could, but I just, I don't see that happening.

(00:29:34):
You know, it's interesting when you were talking about the CFO and the HR contact.

(00:29:40):
So,

(00:29:41):
you know,

(00:29:41):
it wasn't that long ago,

(00:29:42):
a couple of years ago,

(00:29:43):
that I'd say the vast majority of our presentations were to the HR team,

(00:29:48):
right?

(00:29:48):
Because they're the ones that are dealing with the member noise,

(00:29:51):
they're dealing with the members on a day-to-day basis,

(00:29:54):
they're heavily involved.

(00:29:55):
And now,

(00:29:56):
I would say that the majority of our presentations are to the CFO.

(00:30:00):
The HR members may be there, but the CEO now oftentimes is there.

(00:30:07):
And where the CEO used to be a neutral party,

(00:30:11):
the CEO is now much more inclined to favor the CFO.

(00:30:16):
Like, guys, we need to figure out how to keep our doors open.

(00:30:19):
right?

(00:30:19):
So we're going to try things that we might not have tried before.

(00:30:24):
That puts the CEO and the CFO sometimes at odds with HR because HR is like,

(00:30:33):
geez,

(00:30:34):
I don't want to take a reference-based pricing plan or I don't want

(00:30:40):
direct contracts because there isn't a blue or an Aetna logo on my card or I don't

(00:30:47):
want direct primary care because that's too complicated for the members.

(00:30:52):
All of those things that are strategies that are now

(00:30:56):
I don't want to say now surfacing because they've been out there for a while,

(00:30:59):
but getting more and more traction is because the employers are looking for

(00:31:03):
anything that were incrementally move the needle even a little bit.

(00:31:07):
Right.

(00:31:08):
Because to your point, they budgeted for a 10%.

(00:31:10):
They're getting an 18 is somehow they can find a solution that gets them to 14 or 15 or 13.

(00:31:17):
That helps them again.

(00:31:19):
That's not solving the underlying issue.

(00:31:22):
That's just,

(00:31:23):
placating to the fact that they budgeted for 10 and now it's 14 or 15.

(00:31:29):
You know,

(00:31:29):
the thing,

(00:31:30):
Vinny,

(00:31:30):
that I find the most interesting is,

(00:31:32):
and I think this will relate to you,

(00:31:37):
when's the best time for an employer to decide to go self-funded from a claims

(00:31:43):
experience perspective?

(00:31:47):
When is the best time?

(00:31:48):
I mean, certainly when they have, anytime, really.

(00:31:52):
I mean, there's no, anytime they want to move, they could move.

(00:31:56):
Yep, they can.

(00:31:57):
But I guess the way we look at it is employers that are running at a 60% loss ratio

(00:32:03):
now,

(00:32:05):
they're likely still getting a double digit increase from their fully insured

(00:32:08):
carrier or very,

(00:32:09):
very high single.

(00:32:11):
Let's assume they get a 6% increase, right?

(00:32:16):
if the CFO budgeted for 10, they're doing a happy dance.

(00:32:19):
And I go,

(00:32:20):
now's the time you should be self-funding because your claims ran so well that

(00:32:26):
you're probably still overpaying on that fully insured basis.

(00:32:31):
But ironically,

(00:32:31):
do you know over the last year and a half,

(00:32:35):
the number of cases that I saw that came to me with a 30% or more rate increase

(00:32:42):
from fully insured and the consultant went,

(00:32:45):
now's the time I want to take my client self-funded.

(00:32:49):
And I pause and say, why?

(00:32:51):
No, for sure.

(00:32:53):
Well, they got a 35% increase and can't afford that.

(00:32:56):
Well,

(00:32:57):
you're looking at self-funding as a quick fix or as a silver bullet,

(00:33:02):
and there is no such thing in this business,

(00:33:04):
right?

(00:33:04):
Yeah, no, there is, but there isn't.

(00:33:07):
And that's the challenge is that employers, again, and shame on the industry for...

(00:33:14):
waiting until the middle of the year or or the middle of summer to start these

(00:33:17):
conversations with their clients when they when they should be starting these

(00:33:20):
conversations you know on january 2nd when everybody gets back from the holidays

(00:33:25):
you know when open enrollment is over so um well you know i i had a list of about

(00:33:30):
20 other questions i wanted to talk to you about today um but in the interest of

(00:33:35):
time um i i just kind of wanted to to just wrap and and give you uh

(00:33:41):
give you a second to sort of pontificate.

(00:33:44):
And what does this look like in five years, Chris?

(00:33:47):
If you put your crystal ball into action,

(00:33:50):
what does the employer-sponsored health insurance market look like in five years?

(00:33:59):
Well, I hope it's different than what I'm going to expect it to be, right?

(00:34:04):
I expect it to be not significantly different than it is now.

(00:34:10):
in five years.

(00:34:11):
I think that there will be more and more pointed solutions such as people looking

(00:34:18):
to narrow their networks or tier their networks or do direct primary care or

(00:34:24):
leverage on direct contracting for people in a certain geography to help to move

(00:34:29):
that needle to a smaller degree.

(00:34:34):
I do think

(00:34:36):
and fully expect there will be some reform around PBMs.

(00:34:40):
And I think that's got a big driving cost right now,

(00:34:44):
especially with gene and cell therapies coming out,

(00:34:47):
the GLP-1s and a lot of the other inherent costs in pharmacy.

(00:34:51):
I think we're seeing some of that with the current administration really starting

(00:34:55):
to peel back the covers under the PBMs.

(00:34:58):
The challenge is there's a lot of money in the PBM industry as well.

(00:35:02):
And they do a whole lot of political fundraising.

(00:35:07):
So sometimes it's hard to move that needle.

(00:35:10):
But I don't think it's going to be monumentally different.

(00:35:13):
I just think employers are going to be grasping at straws to look for different solutions.

(00:35:19):
I think there could be more emphasis on the consultant and the broker to learn more

(00:35:26):
about self-funding,

(00:35:27):
to be an advocate,

(00:35:28):
because we are seeing a lot of employers that are looking for self-funding.

(00:35:33):
down even lower market in size because they're getting just decimated by these rate increases.

(00:35:39):
So I do think it's going to be more of individual levers being pulled rather than

(00:35:45):
seismic shifts in our industry,

(00:35:48):
just because I don't think in five years we're going to be able to turn that needle

(00:35:51):
fast enough.

(00:35:52):
But I hope that if you ask that question at 10 years out, that it looks fundamentally different.

(00:35:59):
Well, I'm not prepared to do that yet, Chris.

(00:36:00):
Yeah.

(00:36:02):
10 years, we could be a whole, everything could be different, right?

(00:36:06):
Right, no, for sure.

(00:36:06):
So,

(00:36:07):
well,

(00:36:07):
listen,

(00:36:08):
Chris Moyer,

(00:36:09):
thank you very much for being a friend,

(00:36:12):
for being here on the podcast.

(00:36:14):
I think we see a lot alike what's going on in the industry.

(00:36:20):
And I want to know that you'll come back and continue this conversation on the

(00:36:26):
other 20 questions that I have another time in the future.

(00:36:30):
Happy to do it.

(00:36:30):
And happy for your friendship, Vinny.

(00:36:32):
I appreciate that.

(00:36:33):
Okay.

(00:36:33):
Thank you.

(00:36:37):
This podcast reflects the personal views of the host and guests,

(00:36:41):
not their employers or sponsors.

(00:36:44):
See you next time.