Fall 2012 issue of Horizons

PUBLIC SECTOR

Self-Insuring Can Help Manage Healthcare Costs by Chester Moyer, CPA

“ Health-care costs are strangling our country. Medical care now absorbs 18% of every dollar we earn,” comments Dr. Atul Gwande, surgeon, author, and expert on public health. Many state and local governments are struggling to contain costs while maintaining a high level of service to their citizens and fair wages and benefits for their employees. As a result, governments are working hard to identify expenditure areas that can be managed differently.

costs is self-insurance of the healthcare benefits offered to employees. Several governments have recently implemented innovative approaches to try to reduce the costs associated with self-insuring healthcare benefits. Self-insuring means the employer is providing health insurance directly to employees, rather than providing insurance through an insurance company. Savings for state and local governments can be realized in self-insured programs through utilization of employees to administer the plan at a cost less than an insurance company would charge.

One practice that state and local governments frequently use to manage

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