Will the future bring more ObamaCare, some kind of new TrumpCare, or a WhateverCare that falls somewhere in-between? The uncertainty is raising the blood pressure of both business owners and covered employees, but it doesn’t have to. There’s already a proven alternative available to most Indiana companies.
It’s what’s known as medical bill-sharing programs. They may not refer to themselves as insurance, but they embody the basic concept. A group of members who meet certain risk profiles pools their funds with the expectation that if members incur medical costs, the program will pay the lion’s share.
And even though these programs are not insurance plans, they meet the standards of the Affordable Care Act, so members won’t face tax penalties.
There is a key difference between most of these programs and other individual health plan options: they’re offered by faith-based organizations and available only to people who share a particular set of religious beliefs. That doesn’t mean plan members all belong to one denomination. But it does mean that the application process involves certifying that they share the group’s fundamental tenets, most of which are consistent with evangelical Christian churches.
If that sounds surprising, it shouldn’t be. Most insurers were originally set up for the mutual benefit of specific groups, and many of today’s leading insurance companies have names that still reflect those groups. Like all risk pools, the shared bill plans have standards for behavior, such as rejecting applicants who use illegal drugs or smoke.
Bill-sharing programs have other parallels to traditional health plans. They have monthly payments that are similar to premiums. One program we frequently recommend has a PPO doctor network, with reimbursements handled in the same way most insurance companies do, and with reimbursements higher for in-network providers. Members are expected to pay a portion of fees when they receive services, much like the familiar copay. The programs also have deductible-like amounts that members are expected to pay before reimbursements kick in. And, if you have a pre-existing condition, there may be some limitations.
At the same time, most don’t offer some of the extras that drive health premiums up. Generally, preventive care isn’t free, so you may have to pay for annual physicals and your kids’ immunizations. Mental health and substance abuse coverage may be absent or minimal. That’s why the programs may not be the best choice for someone with complex health needs.
How do costs compare? In our experience, these bill-sharing programs cost far less per month than even bare-bones group insurance programs. By limiting the risk pool to members who meet the program’s standards, and giving members more control over expenses, the programs are able to keep costs low.
Since most of these shared plans are open to individuals, how does this apply to business owners and managers? Making shared plans available to your employees, and providing some of the funds to cover the membership cost, is an affordable alternative to the traditional group plan.
Business owners are well-acquainted with the frustrating ritual of group health plan renewals with premium increases that outpace inflation. If they choose to switch to another plan for better rates, they run the risk of infuriating employees whose doctors or preferred services may not be part of the new plan.
Shared medical-bill plans are just one alternative to group plans. Some employers have moved from paying for group health plans to making flat contributions to help employees offset the cost of individual coverage. That puts employees in charge of their own healthcare, giving them an incentive to make more affordable choices. The concept is at the heart of plans being discussed in Washington, but there’s no reason that an employer has to wait for Congress to act.
If you’re thinking that making employees choose their own healthcare plans is a recipe for chaos, think again. There are companies like ours that have organized the process. We maintain a roster of individual plans (including shared options) and manage the enrollment and payroll deduction process. That way, employers are assured that their benefit dollars are actually paying for benefits, and not being pocketed as extra pay.
Whether a shared medical-bill plan is right for you and your employees, the broader message is that you don’t have to wait for relief from Washington to take control of health-care costs. Alternatives such as those described here can be a much more sensible and affordable way to provide the benefits your employees want and need without reducing your profitability.
Scott Lingle, RHU is co-founder and CEO of Remodel Health.