Any employer, or employee for that matter, will tell you that the cost of health insurance continues to climb. In 2007, health care costs were projected to rise 8%. While the rate of increase has slowed, employers across the country continue to look for ways to reduce health insurance costs before they either have to make long-term commitments to health care programs or eliminate health care benefits altogether.
One option being explored is the idea of co-insurance. Co-insurance splits the cost of health services between the employer and the employee and replaces co-pays for doctor visits, prescription drugs and other services. The idea is that by not paying a fixed dollar amount, employees will know how much their health care costs and because they would be paying a percentage of the total, they will be more motivated to find lower-cost providers.
Here are just a few of the advantages and disadvantages to considering co-insurance:
- Encourages the consumer to be more informed.
- Patients get cost and quality report cards on providers. Consumers will take charge of their healthcare; and unnecessary use should diminish.
- Prompts competition among providers on price and quality. Providers will compete for consumer-choice health plan consumers who have tools to compare transparent prices and evaluate provider quality scorecards.
- A leap of faith from traditional health care models. The concept of consumers taking charge of their healthcare is foreign to many employers and employees.
- Consumers may avoid getting necessary care if cost is a concern.
- The consumer-choice health plan competes against traditional plan options which more consumers feel comfortable with because they are more familiar with them. Gaining acceptance may be an uphill battle in the beginning.