The Health Insurance Crisis No One’s Talking About: Why Self-Funding Alone Won’t Save You
Clip of Vinny Catalano and Chris Moyer – Why Employees Think TPAs Are Insurers
Tune into the CLEARly Beneficial podcast with your host, Vinny Catalano, and guest, Chris Moyer. Listen on Buzzsprout, Substack, YouTube or any of your favorite podcast channels.
Here’s a statistic that should make every CFO sit up and pay attention: 75% of mid-sized and larger employers in the United States self-fund their health insurance. Yet most of those employers are still paying inflated rates that barely differ from what they paid when they were fully insured.
How is this possible?
In Episode 8 of The CLEARly Beneficial Podcast, I sat down with Chris Moyer, President & CEO of ASR Health Benefits, to explore this disconnect—and to understand why the health insurance market remains stubbornly resistant to meaningful change despite mounting pressure from all sides.
Chris brings over 15 years of experience leading TPA operations at major health insurance organizations, including his previous role as Vice President of Highmark Blue Cross Blue Shield’s TPA division. If anyone understands both the potential and the limitations of self-funding, it’s Chris.
What emerged from our conversation was a sobering picture of an industry caught between massive cost pressures, entrenched interests, and a critical skills gap that leaves many employers making multi-million-dollar decisions without proper guidance.
The Self-Funding Illusion (Again)
Let’s start with a fundamental misconception that Chris and I both encounter constantly in the market.
Many employers believe that moving from a fully insured plan to a self-funded arrangement solves their cost problem. They’ve taken on the financial risk themselves. They’re no longer paying insurance company profits. They should be saving money, right?
Not necessarily.
“When employers self-fund but stay in a PPO network, they’re often still paying the same inflated hospital rates—around 250% of Medicare—that they were paying when fully insured,” Chris explained. “They think they’ve solved their cost problem, but they’re really just paying the bills differently.”
This is the healthcare cost shell game that too few people understand. Medicare reimburses hospitals at established rates. Medicaid typically pays even less. Commercial insurance—including self-funded plans using PPO networks—subsidizes the difference.
Employers are footing the bill for this massive cost-shifting, often without realizing the extent of the markup they’re accepting.
What TPAs Actually Do (And What They Don’t)
Before we dive deeper into the problems, it’s worth understanding what third-party administrators actually bring to the table.
Chris runs one of these operations, so he gave me the straight story on what TPAs handle for self-funded employers:
Claims processing – TPAs adjudicate claims, ensuring they’re paid according to plan rules and network contracts. This is the operational backbone that allows self-funding to function.
Network contracting – TPAs negotiate or leverage existing contracts with provider networks, giving employers access to discounted rates without having to negotiate directly with every hospital and physician practice.
Customer service – When employees have questions about their benefits, claims, or coverage, the TPA handles those inquiries.
Compliance – TPAs help employers navigate the regulatory requirements that come with self-funding, including ERISA, ACA, and other federal and state mandates.
Here’s what’s interesting: approximately 75% of mid-sized and larger employers use these services. Yet if you asked their employees, most would have no idea their benefits are self-funded. The TPA handles everything so seamlessly that the experience feels identical to a fully insured plan.
But here’s what TPAs typically don’t do: they don’t fundamentally challenge the cost structure of the underlying healthcare delivery system. They operate within the existing network contracts and reimbursement frameworks.
That’s where the skills gap Chris and I discussed becomes critical.
The Consultant Training Problem
One of the most important topics Chris and I explored was the lack of self-funding expertise among brokers and consultants.
“Top-tier consultants often have specialized training in self-funding,” Chris noted. “But as you move downmarket, this expertise becomes less common.”
I’ve seen this pattern myself throughout my career. Many consultants are incentivized to maintain relationships with large insurance carriers rather than developing the expertise needed to properly advise clients on self-funding strategies, reference-based pricing, or other alternative funding arrangements.
At one of my previous employers, we actually required consultants to pass a comprehensive self-funding test before they were allowed to advise clients on the topic. That’s how seriously we took the knowledge gap—and how concerned we were that consultants might steer clients wrong without proper training.
The consequences of this skills gap are significant. Employers are making decisions about multi-million-dollar benefit programs based on advice from consultants who may not have the depth of knowledge needed to guide them properly.
This creates both a problem and an opportunity. The problem is that many employers aren’t getting the strategic advice they need. The opportunity is for consultants willing to invest in developing real expertise in self-funding and alternative funding strategies.
That’s precisely why I’m developing the Clear Benefits Academy, which we’re planning to launch in 2026. The goal is to fill this knowledge gap and help consultants better serve their employer clients.
The Price Transparency Mirage
Chris and I spent considerable time discussing one of the most persistent failures in healthcare reform: the lack of price transparency.
For decades, consumer-directed health plans have been promoted as a way to empower employees to shop for better prices and make cost-conscious healthcare decisions. The theory is sound: if consumers have skin in the game through higher deductibles, they’ll shop around and drive competition.
There’s just one problem: consumers can’t actually access price information before receiving care.
“The absence of price information has fundamentally undermined consumer-directed health plans,” I told Chris during our conversation. “How can employees make cost-conscious decisions when they have no idea what anything costs until after the care is delivered?”
Chris agreed, noting an irony that both of us find frustrating: healthcare executives rarely focus on reducing costs, even though those costs directly translate into the insurance premiums that employers pay.
Think about that for a moment. In what other industry would the executives running the show have no incentive to reduce costs for their customers?
The result is predictable: costs keep climbing, employers keep paying, and the cycle continues.
Value-Based Care: Promise or Pipe Dream?
Given all these challenges, Chris and I naturally turned our attention to potential solutions. One concept that keeps coming up is value-based care.
Value-based care represents a fundamental shift from traditional fee-for-service medicine. Instead of paying providers for volume—the number of office visits, procedures, or tests they perform—value-based care models reward providers for delivering better health outcomes at lower costs.
On paper, this makes tremendous sense. Why wouldn’t we want to align provider incentives with better patient health rather than with performing more procedures?
In practice, however, the transition has been slow and uneven.
“Value-based care shows promise,” Chris noted, “but it’s not a complete solution. We still need collective effort from all stakeholders—insurance companies, hospitals, provider networks, and TPAs—to really address healthcare costs.”
The challenge is that value-based care requires massive changes to how providers are paid, how quality is measured, and how financial risk is distributed across the healthcare ecosystem. Those changes threaten the business models of many powerful incumbent organizations.
Which brings us to the elephant in the room: the lobbying efforts that maintain the status quo.
Both Chris and I acknowledged that significant lobbying from various healthcare stakeholders makes dramatic reform difficult. When you have hospitals, pharmaceutical companies, insurance carriers, and other players all working to preserve their piece of a $4 trillion industry, change happens slowly—if it happens at all.
The C-Suite Awakening
One of the most significant shifts Chris and I discussed was the changing dynamics between finance and HR functions in employer healthcare decisions.
Traditionally, healthcare benefits have been an HR domain. HR teams select the plans, work with brokers, and communicate benefits to employees. Finance teams receive the bills and complain about costs, but often have limited involvement in benefit strategy.
That’s changing.
As healthcare costs consume larger portions of company budgets—in many cases rivaling or exceeding profit margins—CFOs and CEOs are demanding seats at the benefits table. Healthcare is no longer just an HR decision. It’s a C-suite financial imperative.
“We’re seeing much more engagement from financial leaders,” Chris observed. “They’re asking harder questions about ROI, alternative funding strategies, and why costs keep rising despite all the ‘solutions’ the market keeps offering.”
This shift has profound implications for how employers approach benefit strategy. When CFOs get involved, the conversation moves from plan design details to fundamental questions about financial risk, vendor selection, and strategic positioning.
It also means that TPAs, consultants, and solution providers need to speak the language of finance, not just the language of benefits administration.
The Uncomfortable Prediction
Toward the end of our conversation, I asked Chris where he sees the market heading over the next five years.
His answer was honest, if not exactly optimistic.
“I think employers will continue seeking incremental solutions to manage costs,” Chris predicted. “But I’m less certain about significant industry-wide transformation. The complexity of the healthcare ecosystem, combined with powerful incumbent interests, makes rapid change unlikely.”
This is the reality check that anyone serious about healthcare cost management needs to hear. Despite all the innovation, all the new solutions, and all the pressure to change, the fundamental structure of American healthcare remains stubbornly resistant to transformation.
That doesn’t mean employers are powerless. But it does mean that anyone promising a silver bullet solution is either naive or dishonest.
What Employers Can Actually Do
So where does this leave employers trying to manage healthcare costs?
Based on my conversation with Chris and my own experience in the industry, here are the practical takeaways:
Get educated on self-funding – If you haven’t explored self-funding, you need to understand both its potential and its limitations. Work with consultants who have real expertise in this area, not just surface-level knowledge.
Engage your CFO – Healthcare benefits need to be treated as a strategic financial decision, not just an HR administrative function. Your CFO should be involved in major benefit decisions.
Look beyond traditional networks – Self-funding alone isn’t enough. You need to explore alternative funding strategies like reference-based pricing, direct contracting, or centers of excellence.
Demand real expertise from your consultant – Don’t settle for a broker who’s just moving paper between you and insurance carriers. Find consultants willing to invest in specialized training and who can provide strategic guidance.
Set realistic expectations – There’s no magic solution that will slash your costs in half overnight. Meaningful cost management requires a long-term strategy and a willingness to try new approaches.
Focus on education – Your employees need to understand how their benefits work, what their options are, and how to make cost-effective choices. Communication matters.
The Honest Conversation We Need
One thing I’ve learned over 22 years in this industry: the most valuable conversations are the honest ones.
Chris didn’t sugarcoat the challenges. He didn’t promise that TPAs would solve all your problems or that self-funding is a panacea. He acknowledged the skills gaps, the perverse incentives, and the powerful forces resisting change.
That’s exactly the kind of conversation employers need to hear—not another sales pitch from someone trying to sell them the latest “revolutionary” solution.
My independence as a consultant allows me to have these conversations without worrying about corporate messaging or upsetting vendor relationships. Chris’s willingness to speak candidly about both the potential and the limitations of self-funding and TPA services reflects the kind of honesty that’s often missing in this industry.
If you’re an employer frustrated with rising healthcare costs, or a consultant trying to better serve your clients, I encourage you to listen to the full episode. Chris provides insights that you won’t hear from someone trying to sell you something.
Key Takeaways for Employers and Consultants
- Self-funding alone doesn’t solve cost problems – It changes who pays the bills but doesn’t automatically reduce the underlying costs
- 75% of mid-sized and larger employers self-fund – Yet many still pay inflated PPO rates around 250% of Medicare
- There’s a critical skills gap – Many consultants lack the specialized training to properly advise on self-funding strategies
- Price transparency remains elusive – Despite decades of consumer-directed health plans, employees still can’t access prices before receiving care
- Value-based care shows promise but faces obstacles – Requires massive changes to payment models and threatens incumbent business models
- CFOs are demanding involvement – Healthcare costs now require C-suite attention and financial strategy
- Incremental improvement is realistic – Dramatic industry transformation faces significant barriers from complexity and lobbying
About Chris Moyer
Chris Moyer serves as President & CEO of ASR Health Benefits, a subsidiary of Health Alliance Plan. With over 15 years of healthcare leadership experience, Moyer previously held senior roles at Highmark Blue Cross Blue Shield, most recently as Vice President of its third-party administrator (TPA) division, HealthNow Administrative Services. He collaborates with HAP Sales and Account Management teams on growth opportunities while leading an experienced team focused on delivering customized benefit solutions for companies across multiple industries. Moyer serves on the Board of Directors for the Greater Philadelphia Area Health Underwriters and is active with the Self Insurance Institute of America (SIIA) and Health Care Administrators of America (HCAA).
About CLEAR Healthcare Solutions
CLEAR Healthcare Solutions is a consulting firm specializing in medical practice improvement, employee benefit strategy, point solution go-to-market strategy, expense reduction, and healthcare and insurance education. The company leverages over two decades of industry relationships and expertise to bring fresh perspectives to healthcare and business challenges.
About The CLEARly Beneficial Podcast
The CLEARly Beneficial podcast rips off the band-aid on healthcare and explores the future of benefits with industry innovators. Whether you’re an insurance broker, HR professional, employer, or engaged professional, the podcast delivers straight talk and actionable insights from someone with decades in the trenches. The show takes a solution-oriented approach, featuring conversations with healthcare CEOs, authors, innovators, and leaders driving positive change across industries.
New episodes are released weekly on all major podcast platforms.
For more information, visit www.clearhcs.com or connect with Vinny Catalano on LinkedIn at www.linkedin.com/in/vcatalano.
Disclaimer: This content is for educational purposes only. Please discuss your specific situation with your health benefits administrator or insurance provider for personalized guidance.