Bryan G. Yates
Vice President, Employee Health & Benefits
As every renewal season approaches, Tribal employers face a difficult but familiar trade-off: accept another round of premium increases within a fully insured plan or explore alternatives that can feel complex and financially uncertain.
That hesitation is understandable. Fully insured plans are familiar, predictable and easier to renew. However, as renewal terms become increasingly “take-it-or-leave-it,” more employers are asking whether self-funding could offer a smarter path forward.
With the right structure in place, self-funding can help Tribes gain more control over healthcare spending while opening the door to strategies most employers cannot access.
Here are the biggest opportunities that self-funding can create.
What is self-funding?
Think of it like renting versus owning.
Fully insured = renting
Under a fully insured plan, the Tribe pays fixed premiums to an insurance carrier each month. The carrier controls much of the plan structure, absorbs the claims risk, and keeps any unused premium dollars. While this model may feel predictable, costs can continue to rise with limited visibility into where healthcare dollars are actually going.
Self-funded = owning
Under a self-funded plan, the Tribe takes on more direct control of the health plan. Instead of paying a carrier to fully absorb the risk, the Tribe pays healthcare claims as they happen. To protect against unexpectedly large claims, most self-funded plans include stop-loss insurance, which helps limit financial exposure.
The advantages Tribal organizations can unlock under self-funding
Self-funding can become especially powerful when paired with the healthcare resources, partnerships, and funding pathways available to Tribal entities.
Turn Tribal clinics into a stronger financial asset
Many Tribes are moving toward 638 self-determination, taking over clinics and services previously managed by the Indian Health Service (IHS). Under a fully insured plan, employee health dollars may still flow away from these Tribal clinics and into outside provider networks.
Self-funding can help close that loop. The plan can be designed to encourage employees to use Tribal-owned facilities when appropriate, potentially reducing costs while enhancing the financial sustainability of the clinic and strengthening the Tribe’s economic independence.
Capture more savings on prescription drug costs
Prescription drug costs continue to put pressure on health plans nationwide. According to the Centers for Medicare & Medicaid Services, U.S. prescription drug spending increased 7.9% in 2024. For Tribes with qualifying clinics or pharmacies, the 340B Drug Pricing Program can create a major opportunity to lower pharmacy costs and keep more value within the Tribal healthcare system.
Fully insured plans often limit how much control Tribes have over pharmacy strategy, pharmacy benefit managers and where medication dollars ultimately go. Under a self-funded model, Tribes may have more flexibility to align employee pharmacy benefits with eligible Tribal clinics, pharmacies, and 340B pricing opportunities.
This means pharmacy spending can be structured more intentionally, rather than flowing through a carrier-controlled model that may leave savings on the table.
Create a lower-cost path for outside care
Specialty care is one of the biggest cost drivers in any health plan. When care cannot be provided through IHS or Tribal healthcare facilities, employees may need outside services such as surgery, hospital care, specialty visits, or advanced imaging. In a traditional commercial insurance model, those services can come with much higher reimbursement rates.
Certain Tribal healthcare programs may be able to use Medicare-like rates for qualifying outside referrals, meaning eligible referred care can be paid at rates tied to Medicare rather than higher commercial insurance prices.
With greater plan design flexibility, Tribes can build these pathways into the employee health plan and create a more intentional way to manage high-cost outside care.
Make healthcare dollars work harder for future generations
Self-funding is not just a benefits decision. For Tribes, it can be part of a larger strategy to protect the bottom line, strengthen resources and build more sustainable systems for future generations.
Connect with a Marsh McLennan Agency representative to evaluate the data, compare potential outcomes, and determine whether self-funding creates a true financial advantage.
This content is for informational purposes only and should not be construed as financial or legal advice. Marsh McLennan Agency does not endorse any specific third-party products or services, and coverage details are subject to the terms of the policy contract.
