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Can Employers Help Lower Health Care Prices through Self-Insured Plans?

10 FAQs about Employer-based Health Plans

Recent data from the Health Care Cost Institute (HCCI) show that price growth accounted for more than half the change in per person health care spending from 2017 to 2021. Nearly half of people in the US get health insurance through work, either through their own employer or as a dependent. Accordingly, rising health care spending is a big problem for employers and employees. In collaboration with West Health, HCCI has answered ten questions about the role of employers in lowering health care spending.  

  1. What role do employers play in U.S. health care spending? 
  2. How do employers pay for their employees' health insurance? 
  3. How many people are in self-insured plans? 
  4. Why do many employers decide to use self-insured plans? 
  5. What is a third-party administrator (TPA) and what do they have to do with health care prices? 
  6. (How) are self-insured plans regulated? 
  7. What factors work against employers' ability to lower health care costs? 
  8. Are employers' self-insured plans able to obtain lower prices for health care than fully-insured plans? 
  9. Do employers have any tools to lower prices in self-insured plans? 
  10. How can policymakers support employers in lowering prices in self-insured plans?

This work builds upon research published Aditi P. Sen, Jessica Y. Chang, and John Hargraves in the September 2023 issue of Health Affairs and featured on Health Affairs' "A Health Podyssey" Podcast.

Download a PDF of the issue brief below.
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