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The movement toward increased employee responsibility for healthcare costs can present difficulties not just for employees, but also for insurance companies, administrators and providers. If employees do not have a financial safety net and are struggling to pay their bills, it can affect the bottom line for providers (increased losses) and for insurers and administrators (reduced discounts).
One way to mitigate the effect of increased provider losses is for the insurer or administrator to take steps to guarantee provider payments. The challenge is to do it in a way that the insurer or administrator also is guaranteed repayment.
E-Duction’s Credit Solutions solve this challenge. Similar to our HSA Credit Products, consumers may pay for healthcare expenses through either their savings or via guaranteed-issue, low-interest credit for expenses that are not otherwise fully funded. When an expense comes through, it is funded from the consumer’s savings if possible. When the savings have been depleted, any remaining amount will be covered by the credit program and in turn repaid via automatic payroll deduction.
Because payment is guaranteed through either savings or guaranteed low-interest credit repaid through payroll deduction, insurers and administrators should be able to protect, and perhaps even increase, provider discounts. This can help offset overall increases in healthcare costs.
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