Reference Based Pricing – Why Pay A Premium of 20% or More?

Medicare ties reimbursement to cost, health insurance doesn’t. That’s the difference………

By Bill Rusteberg

“Our RBP plans pay 120% of Medicare” says one broker. “Ours pays 150%” says another. Why the difference?

The answer is “Fear.” Fear of balance billing. Fear of providers refusing to accept patients. Fear of ruined credit. Fear employees will revolt. Fear is a powerful emotion.

It’s time to become fearless.

Health insurance is unaffordable, especially if you have to use it. It’s time to stop the madness. It’s time to replace fear with anger. It’s time to act. It’s time to apply common sense, reason and logic.

Health care costs have remained essentially static over the past 15 years. If one ties provider reimbursement to cost, health insurance premiums would remain essentially static too.

Medicare ties reimbursement to cost, health insurance does not. That’s the difference.

Medicare payment is almost universally accepted in the provider community across the United States. Why not duplicate the reimbursement methodology? Why is it deemed necessary among RBP vendors to add 20%, 50% margin or more when you don’t have to?

An employer would be wise to offer a Medicare look-a-like plan for their employees but with better coverage than what Medicare offers. Eliminate all patient responsibility (deductibles, co-pays and co-insurance are silly) and enjoy (1) Immediate cost savings of 40% and more and (2) stable rates year after year.

The only out-of-pocket expenses plan members could have are balance billed amounts. However, a member would never experience a balance bill if they always ask the price before they buy health care services. That’s a standard American buying habit in everything else other than health care. It’s time to change that.

If a plan member wants insurance to cover balance billing (A Medicare Type Supplement) there are insurance companies and commission driven insurance agents standing by willing to sell them a policy. These types of policies are designed to alleviate the Fear Factor. It is also for members who never ask the price.

There is a growing movement in this country to expand Medicare to all Americans. Why wait for the politicians to act? Employers can start that process right now.

 

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