Archive for November 30th, 2010

The Fallacy of Bidding Out Self-Funded Health Plans To Save Money

Tuesday, November 30th, 2010

Many political subdivisions within Texas self-fund their group medical plans. In fact, most choose this financing method over purchasing fully-insured cover from a carrier. The choice seems obvious: self-funded group medical plans save money.

Or do they?

With the need to bid out their health insurance plans, cities, counties and school districts bid out everything except the component that drives 100% of their risk. They bid out third party adminstration services, PPO access, Rx administration and stop loss insurance. All these services account for as little as 10% of the Plan’s total cost.

What about the other 90% of Plan costs? Why don’t political subdivisions bid out that too?

Because they are ignorant, or just naive. Or, they trust their advisors who are ignorant or naive.

Political subdivisions should bid out provider costs too. They should invite interested hospitals and doctors to bid for the Plan’s substantial assets. Providers will compete for business, as has been proven by such groups as Bill Miller Bar B Q (Bill Miller Forbes), Tyler Independent School District, Blue Bell Creameries, San Patricio County, Texas Med Clinic, and many more progressive employers whom we have had the pleasure of working with in the past three years.

The problem is that political subdivisions have never bid out the dominant risk factor of their plan and instead have historically  “gifted” public funds through intermediaries who have negotiated secretive contracts with health care providers. See Health Care Strategies for Texas Political Subdivisions.

This is upside down.

First Step In Eliminating The Broker? Encourage Clients to Deal Direct & Bypass Broker?

Tuesday, November 30th, 2010


New Customer Service Enhancement Set for Texas  

Beginning December 1, an enhanced customer service experience called UnitedConnect will be available for our customers in Texas who have up to 99 eligible employees and who have held at least one policy with us for three or more consecutive years. Eligible small business customers who choose to use the UnitedConnect service will be connected immediately with a customer service representative who will handle their call from beginning to end, no matter what the issue or concern.  

The UnitedConnect team can be contacted via phone at 1-877-634-0267 from 7 a.m. – 7 p.m. Central Time and via email at

This new service model compliments our current broker models including the Platinum Dedicated Client Service Managers, Gold Broker & Elite, and the General Agent Service Teams. These models will remain intact and will operate as they do today. You may elect to tell your clients to continue to contact you directly, or you can extend the UnitedConnect team to your eligible clients.

Customer Communications
Starting in early December, we will be sending all eligible Texas small business customers a letter announcing the availability of UnitedConnect. 

Contact your UnitedHealthcare account representative for more information or with any questions about UnitedConnect.

The Beginning of The End of Employer Sponsored Health Insurance?

Tuesday, November 30th, 2010

WASHINGTON – Job-based health care benefits could wind up on the chopping block if President Barack Obama and congressional Republicans get serious about cutting the deficit.

Budget proposals from leaders in both parties have urged shrinking or eliminating tax breaks that help make employer health insurance the leading source of coverage in the nation and a middle-class mainstay.

Editor’s Note: If group health care costs the employer about 8-10% of payroll, and becomes taxable, then would it not be better for the employer to drop his health plan and pay the employees an additional 8-10% in pay. After all, employee wages are tax exempt to the employer and is another line item in the cost of doing business.