One key obstacle: out-of-date thinking that only comprehensive, major coverage is of value -- that if it's not full-blown, comprehensive coverage, it's no good.
Why does this misunderstanding matter? Here are some facts:
- When people go without health insurance, they go without routine and other medical care. Preventive assessment, well care, early detection and intervention of disease doesn't happen. Time away from work increases. People's medical conditions worsen and the ultimate cost for health care goes up.
- Most people look to their job as the source for health care benefits. According to Kaiser, more than 160 million people in the United States receive health benefits through an employer-sponsored system. Where employer-based insurance access does not exist or when it goes away because of job loss or because an employer no longer offers coverage, all but a few employees go without coverage.
- Finally, in the period 2007-2008, almost 80 percent of the uninsured in the United States came from working families. Almost 70 percent included a family member working full-time, and 4.5 percent of the uninsured were looking for work. That means 84 percent of the uninsured are in the labor market, according to resesearch from the Self Insurance Institute of America.
"Modern" health insurance in America is only about 80 years old, and it has evolved predominantly as a workplace-rooted program. There's a reason health insurance always ranks as the most important aspect of compensation, second only to pay.
So, if the vast majority of uninsured are in the labor market, if the vast majority of people look to the workplace for health benefit programs, and if securing health benefits through work is in the interest of both workers and employers, there needs to be an aggressive effort to bring affordable access through the workplace to as many people as possible. Unfortunately, the opinion persists that even small businesses with limited cash flows must provide across-the-board benefits to all employees, even in the face of escalating healthcare costs.
Limited-benefit/fixed-payment medical plans present an alternative to this "all-or-nothing" approach.
Limited Benefits or No Benefits?
No one ever suggests that if you can't afford a 5,000 square foot house, you can't have a house at all. No one says that if you can't afford prime filet, you can't eat meat. The fact is, if you can't afford the best, or if someone can't give you the best, what is achievable is far better than nothing. More to the point, what is best for any given person is what they need most, is affordable, and can be had and sustained.
Is a single mother with two kids making $28,000 a year better off with a health program that enables her access to care, access to discounts on the cost of care, well care benefits for her children, benefits for sick visits or accidents, and benefits for early diagnosis of diabetes, hypertension or breast cancer -- or with nothing at all? I know what she would say, because I have talked with her.
Employers know that their ability to attract and retain the best employees is a competitive advantage, and that having a healthy, motivated staff is critical. Employers must look at the needs of their entire spectrum of employees, their company values, and what they can afford. Then, they need to construct a holistic strategy enabling access to meaningful and affordable benefits for everyone. That is not to say they have to directly finance coverage for everyone. There are many ways to affect both affordable coverage and appropriate cost sharing.
Here is a real-case example of how this holistic view towards coverage created more integrated health benefits for an entire work force.
An employer on the East Coast, working with their broker and a carrier, modified their major medical plan to a high-deductible, HSA-compatible plan in order to stabilize the program and reduce costs. Employees covered by the plan had the individual option of either a) establishing an HSA to handle the expenses not covered due to a high-deductible, or b) electing a "gap" -- or supplemental -- limited-benefit plan structured to provide key benefits that would not be covered under the major plan.
The employer, broker and carrier then structured another limited-benefit group insurance plan for all otherwise non-health insurance eligible employees that included commonly-used basic benefits. They chose to pay the cost of that plan for those working 20 or more hours a week with two years tenure, and made the same plan available on a voluntary basis to those either working less than 20 hours per week or with less than two years of tenure.
The result: everyone now has access to coverage, the employer's costs are reduced, the major plan is stabilized, and cost sharing is reasonable based upon the circumstances of the employees. It is a complete win for all parties.
Employers don't know what's available to them without their brokers and consultants presenting options and possibilities to them. The burden falls to brokers and consultants nationally to do their homework, abandon preconceptions, discover alternatives and invest time thinking and working with clients to do what needs to be done.
There are broad-based solutions to the issue of the uninsured that are cost-effective and available. Building on the progress made by limited benefit insurance policies and other major medical alternatives -- plans that are getting increasing numbers of previously uninsured workers into doctor's offices -- we can move beyond the "all-or-nothing" health plan mind-set.
