Breaking free from the health insurance industry deductible/coinsurance standard.

How variable copays can save money for employees and employers.

In most industries, higher prices correlate with higher quality. In health care―not so much. Health care costs in the U.S. vary widely for the exact same service. For example, in Minnesota, knee arthroscopy costs can range from $7,000 to over $35,000. These cost variances play into how the health insurance industry sets member cost shares in their health plans.

Most health plans are not able to provide clear prices to members in advance of care because deductibles and coinsurance make it impossible to accurately predict what a member’s cost will be. If pressed, the best they can do is provide an estimate based on historical cost averages since they won’t know all the services the provider will perform.

Often, health plans aim to pay approximately 80% of the cost and require the member to pay about 20%. A richer benefit would increase the plan’s percentage of the cost and decrease the member’s percentage. Ultimately, health plans strive to set up the distribution of dollars between the members and the plan to align with their cost projections.

The industry’s fixed copay model

For plans that are not high deductible health plans, the industry may use copays to provide cost certainty for members by assigning a fixed copay to a service across all providers. However, many copay plans will only have copays established on a subset of services. These plans will apply coinsurance on more costly services like outpatient or inpatient hospital services where the member will pay a percentage of the cost if they stay in-network. For example, the member could cover 20% of the total amount paid to the provider.

The tiered networks approach

In some cases, the industry will build on these different pricing models by layering in tiered networks. For example, a health plan may set a lower fixed copay for a service category for a provider within a preferred tier and a higher fixed copay for that service with a different provider that is in a non-preferred tier. The tiers are typically established at a health system level, meaning all the providers or facilities within an organization will be assigned entirely to a single tier. Plans typically will have two or three tiers, and the cost difference can be significant based on whether the provider qualifies for the top tier or not.

Surest does it differently―flexibility, choice, and variable copays

With most health plans, the member has limited opportunity to make care choices based on the information they are provided. Under fixed copay plans, they may have clarity on their cost, but limited to no ability to choose a different price based on what provider they select. Under deductible and coinsurance models, their cost will vary depending on the provider they choose, but they don’t have visibility into what those cost differences will be before choosing care.

The no-deductible, no-coinsurance Surest plan provides members choices by offering variable copays with prices clearly listed up front. Members can search for care on the app or website and see prices for various providers, locations, and care options so they can choose what best fits their needs and budget.

With Surest, lower copays indicate providers evaluated as high-value options based on factors impacting quality, efficiency, and overall effectiveness of care—providers that may help members feel better, faster. And when members select lower cost options, not only can they save, but the employer can save, too.

How Surest varies copays for services, providers, and locations

The Surest approach to evaluating providers is used to inform its value-based copays. It’s not just unit cost that drives the provider evaluation, but rather “episodes of care” that account for provider practice patterns that incorporate into the Surest plan’s variable copays. The methodology includes a broad set of factors that include characteristic signals of quality, efficiency, safety, and effectiveness, which impact performance.

When Surest evaluates providers―by location (e.g., hospitals, ambulatory surgical centers, and clinics) or by practitioner (e.g., doctors, nurse practitioners, and physician assistants) ―they build these episodes of care around an anchor event, whether that's a condition (e.g., diabetes) or a service-based event (e.g., knee replacement).

Episodes are run on UnitedHealthcare commercial claims data, and providers are assessed on a broad scope of services and conditions. Surest evaluates each of these holistically as complete “episodes of care” that encompass the various medical touchpoints related to the service or condition along with their associated costs. Surest establishes provider benchmarks based on these evaluations which are used in combination with its plan design to establish member cost share. When members search the Surest app or website, they see the resulting variable copay options—with costs clearly listed—enabling them to make informed health care choices.

Employers on the Surest plan say this transparency really helps employees be involved and engaged in how they consume health care services. “I’ve been in HR for over 30 years, for so much time your health insurance benefits were put upon you,” said Adele Johnson-Kebe, VP, Chief HR Officer, Dayton Children’s Hospital. “The decision making in terms of what you had available to you or how much it would cost was just kind of put there, deal with it or not. Now you have more of an ability to say, I need to choose this type of service or this type of health benefit. How much is that going to cost me? Who are the providers that are available to me?”

Surest takes simplicity even further

Surest increases ease-of-use even more by bundling together certain services into a single copay. Conversely, members having a surgery on a deductible or coinsurance plan may receive bills from the hospital where the surgery was performed, the physician who did the surgery, the anesthesiologist who sedated them, and the facility’s lab. Surest simplifies this for members by bundling those costs into one copay―visible in advance―that covers the various services related to the surgery.

The comprehensive Surest approach to setting variable copays results in giving members the information they need to navigate care choices and make decisions that work for them along their care journeys.

Giving members copay and care options produced impressive results

Members choosing providers evaluated as high value translated to improved outcomes

The major difference between how the industry prices care and how Surest does it is the unique variable copay structure Surest offers. The Surest plan delivers flexibility and choice, providing members with information at their fingertips to make informed health care decisions. This separates Surest from other health plans and benefits both employers and members with opportunities to save and improve health outcomes.

1Comparison of 2022 medical out-of-pocket spend for members who migrated to a Surest plan in 2022 compared to members from the same employers in a non-Surest plan. 141_V04.

2Surest 2022 book of business plan sponsors with both medical and pharmacy data within our warehouse; industry 2022 commercial benchmarks and risk adjustment methodology. Risk adjusted for demographics, geography, and disease burden. 56_V04.

32022 Surest book of business. Surest Proprietary provider ranking and subsequent member choice. 171_V01.

4Surest 2022 book of business plan sponsors with both medical and pharmacy data within our warehouse; industry 2022 commercial benchmarks and risk adjustment methodology. Risk adjusted for demographics, geography, and disease burden. 168_V01, 66_V03, 171_V01, 71_V03, 67_V03.

5Comparison of members identified as having 12 months of enrollment in a UHC plan in 2021, and 12 months of enrollment in a Surest plan in 2022. 170_V01.

6Surest Doctor On Demand (DoD) 2022 utilization compared to 2022 DoD book of business. 46_V04 152022 Surest book of business. 131_V03, 125_V03.

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