Where Does Your Money Go?
Compare Traditional Insurance vs MediDirect®
Compare a traditional insurance plan versus a MediDirect® plan
In reality, all benefit plans are "cost plus". With group health insurance plans, the excess "cost plus" portion is administrative costs and risk premiums, and can be in excess of 40% of the premium. The MediDirect® administration fee is only 10% of your medical cost (plus applicable taxes), and payments are only made when an expense is incurred.
With group health insurance the employer pays more in premiums than the insurance company pays out in health claims. In our extensive analysis, we have not found one example where more has been paid out in claims than premiums charged. Companies are, in reality, self-insuring their benefit plans by paying the full claim amounts PLUS administrative fees. Depending on the size of the company, the administrative fees can be an additional 20% to 80% of the benefit costs. Combined, the benefit and administrative cost is called the premium.