Employers Switch from Commercial Insurance to Self-Insured Plans

According to Citibank’s top ranked analyst Carl McDonald:

By our analysis, since 2002, risk enrollment at the publicly traded plans has fallen by over 14 million lives…The emergence of private exchanges that rely on a risk model (like the exchange product offered by Aon Hewitt) could help slow the loss of risk enrollment but the benefits of self-funding are so significant for many employers that we believe risk enrollment will continue to shrink.

Comments (8)

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  1. Matthew says:

    “Loyal readers will remember we predicted this some time back.”

    That’s no surprise, I have seen numerous predictions come true just from the health policy blog. The NCPA is definitely ahead of the curve on most issues.

    • James M. says:

      Just wait when in a year, policies will change to what was talk about in this blog.

  2. Thomas says:

    Companies will always go the way that is most cost effective for their business. Switching to self-insured plans is just another step to take.

  3. Jordan S says:

    People ignore warnings and then ask why nobody told them. That’s what’s happening in the healthcare industry. Many warned against the reform, foretelling grave consequences, yet the administration ignored them. Now that the system is broken, they wonder what went wrong.

    • Bill B. says:

      They get warned and don’t listen, then once adverse change is set into place, they are upset because they didn’t listen.

  4. Jimbino says:

    If I were an employer facing the stupidity of Obamacare, I’d self-insure too, but only to cover all the old, sick and breeders, and I would offer unbenefited contract jobs at twice the pay to the young, single, healthy and childfree men and women.

    • Buddy says:

      I like the way you think Jimbino. If only those were the options available to young men and women now, they’d be much better off.

      • Jimbino says:


        These options are available. One option is to emigrate to places like Hong Kong, Singapore, Estonia, Chile, where your efforts are rewarded by more cash and fewer “benefits.”

        Another option is to work as a contract employee. No benefits need be offered to a contract employee with a term less than a year: no FMLS, sick pay, vactaion pay, Obamacare. You still have to participate in FICA taxes, unfortunately in the USSA.

        Another option, which John Galt would recomment, is to improve principal residence property, sell it after two years, and earn, in capital gains, a great living tax-free, FICA-free and Obamacare-free for the rest of your life.

        Or become an Ecuadorian resident, return to the USSA and work off the books. You will be free of Obamacare but will enjoy tuition privileges that USSA residents themselves don’t enjoy. And any kids you pop out will also get special privileges.

        There are lots of ways to game the system, and if I were a young man, I’d just marry a series of foreign women, all of whom would be entitled to my SS benefits and would show their appreciation. If I were a young woman, I’d just get pregnant by a stupid-ass captain of industry or, even better, a rich politician.