“In risk transfer one must always keep in mind that, by definition, there will be a loser for every winner” – Carlton Harker
How did your last year’s group health plan perform? Did you get a rate increase? If you did rejoice, you won and the payor lost otherwise your rates would not have increased if you hadn’t received more in benefits than you paid for.
Or did you? If you’re self-funded, you’re the payer which means you lost. Only if you’re fully-insured are you a winner in this instance. But wait! Stop loss cover, a casualty product, is fully insured. If that’s in place you can be a winner and loser at the same time.
Some would say you win when rates don’t go up. But you don’t because the payer spent less of your money than you paid them, winner take all. That means they won. But wait, if you’re self-funded you’re the payer which means you won.
If getting a rate increase is winning and getting no increase is losing, while sometimes you win and lose at the same time, what makes the difference?
