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Self-insured health plans dominate the U.S. employer plan market, and three big health insurers — Elevance, Cigna and CVS Health — dominate the market for administrative services for those self-insured plans.
Jean Abraham, Amanda Cook and E. Tice Sirmans have published data supporting those conclusions in a paper on the "administrative-services only" market in Health Affairs, an academic journal that focuses on topics related to paying and delivering health care services.
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The researchers argued that understanding the self-insured employer plan market and the ASO contractor market is critical for any researchers who want to understand the U.S. commercial health insurance market, because about 65% of the U.S. workers with employer-sponsored health coverage are in self-insured health plans.
Over the period from 2010 through 2022, the employer plan market attracted 130 to 187 providers of fully insured group coverage each year and 53 to 62 ASO contractors, according to the researchers' analysis of data reported to the National Association of Insurance Commissioners and compiled and distributed by S&P Capital IQ Pro.
Elevance, Cigna and CVS were administering coverage for about 71 million of the participants in the self-insured plans by 2022.
ASO fees averaged about $190 per enrollee at the "top 3 ASOs" and $258 per enrollee at the other ASO, and the median profit for all players was $40 per enrollee per year, the researchers found.
But the top 3 ASOs always reported profits, ranging from about $9 to $68 per enrollee per year, and the median result from the other ASOs was a loss of about $13 per enrollee per year.
Related: 5 reasons ICHRAs could be a an alternative to self-funding
"This statistic suggests that many insurers in this group were incurring ASO business losses, which may reflect unanticipated expenses or strategic pricing decisions (for example, pricing to acquire volume for provider negotiations)," the researchers write.
The researchers suggest that self-insured plans may be paying higher prices for health care than other payers.
One way for the NAIC to help researchers and employers get more information about the ASO market would be to require insurers to break information about their ASO operations down by state, the researchers suggest.
The researchers' paper is part of a Health Affairs issue focusing on risk adjustment, insurance markets and related topics.
Also in the issue:
- Researchers found that employers' small-group health plans may pay doctors and other health care professionals an average of about 6.9% more the individual and family coverage providers. Small-group players may also pay about 13% more for inpatient hospital care and 26% more for outpatient hospital care.
- Researchers have suggested that hospitals' conscious efforts to "upcode," or bill insurers for higher-intensity care possible, contributed to at least two-thirds of growth in the highest-intensity hospital patient discharges in five states analyzed from 2011 through 2019.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
