OOO: Alternative health plans are fighting the system. Are they all they're cracked up to be?

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More than three months after Luigi Mangioni shot and killed UnitedHealthcare CEO Brian Thompson, the U.S. health insurance system remains a fraught institution people are increasingly fed up with. Despite the tragedy any loss of life brings, the fact remains that insurance tied to employment (or marriage) is problematic for a large swath of citizens, and coverage people do have tends to be incomplete. 

As a freelancer, I bear the weight of my own $549.77 monthly premium for a plan with a $1,700 deductible and $5,700 out-of-pocket maximum. I’m one of the millions who Alan Cohen, co-founder and chief product officer at alternative health plan company Centivo, might call “functionally uninsured.”

Functionally uninsured

“To start an insurance company, that's difficult in this country, for good reason. You have to protect the consumers. You have to have reserve,” said Cohen. “But also, some of these rules are about protecting the insurance companies that are there today.” 

Oh, heard.

Despite the foothold legacy health insurance institutions hold in the nation, these alternative health plans are gaining steam. Just before writing this, a self-employed and previously uninsured friend of mine mentioned they signed up for Christian Healthcare Ministries, an alternative health plan where individuals can pay into a larger bucket for access to care coverage. This anecdote is in line with larger trends. Last year, Mercer published a survey stating that 36% of large employers now offer high-performance network plans or other alternatives; another 29% are considering it in the near-term.

Another entrepreneur, Jehann Biggs, President & Owner of In2Green (purveyor of environmentally conscious blankets), takes this route with her employees. With a small team of under 15 people, Biggs said she’s largely satisfied with the coverage. “Employees have greater access to primary care, which encourages them to stay on top of their health,” she said. “The cost savings have also been notable, as we are able to provide comprehensive care while keeping expenses down for both the company and employees.”

Where the opportunities — and costs — really lie

“The core problem with our healthcare system all comes down to finance, the way in which we pay for healthcare,” said Cohen. “The fact that people don't get the preventive care they need, the fact that people don't get the primary care they need, the fact that we have social inequities in healthcare, the fact that surgeons get paid a lot more than primary care providers, the fact that we have infant mortality rates that are among the highest in the developed world. We've got to look ourselves in the mirror.”

Centivo works with employers, including major companies like AT&T, JPMorgan and Wells Fargo, offering their plans alongside another health plan administrator such as Cigna, Blue Cross and, yes, even UnitedHealthcare. The freedom lies in the employee’s ability to choose.

Centivo differs from the status quo by offering smaller networks, which Cohen refers to as high-value providers (low cost, high quality). I live in South Central Pennsylvania, and my region isn’t yet covered, he said, but Centivo’s nearby Philadelphia network includes the UPenn healthcare system and excludes the Jefferson healthcare system.

Centivo requires patients to start every journey with their primary care provider (visits to PCPs are free, and there are no deductibles on these plans 😲), who then guides them through the network. This isn’t a matter of getting approval for coverage, said Cohen, adding, “It's not just about sending you on a referral and letting you go off to the orthopedist. It's actually about working with the orthopedist to co-manage your care.”

The smaller network availability might be a problem for some. And for those who are working through serious medical episodes in their existing networks that aren’t covered with an alternative health plan, now would not be the time to get out of dodge. 

And while high-deductible plans are wrong for many, they’re right for some — namely those who have already built up strong HSA (health savings account) balances. After Centivo finally got its own HSA-qualified deductible plan, Cohen himself was finally able to eat his own dog food, as the tech world likes to put it. “We don't want to force people to have to have a deductible if they're not ready for it. As long as you offer our standard partnership plan, you can also offer a high-deductible plan alongside it,” said Cohen.

‘Even battleships eventually turn’

For Biggs of In2Green, there are gaps for the plan she offers her employees. For example, she has to provide the option of prescription gap insurance to fill holes. “These plans can sometimes lack coverage for more complex medical needs,” added Biggs. This means that while employees have access to routine and preventative care, those with chronic conditions or who require specialty care may not always find the right solutions within the network. “We’ve learned that balancing cost-efficiency with comprehensive care is still a challenge but are pleased with the overall shift in our employees’ health outcomes,” she said.

In other words, it’s still not a perfect world. But something Cohen said hit real deep in my chest — how the prevalence of alternative health plans for the workforce and beyond could put pressure on the big guns to change.

“We're not naive to think that we're going to serve everyone's needs across the country, everywhere, every time,” he said. “I'd like those big health plans to pay attention to what organizations like us are doing and change…It's a bit of a battleship, but even battleships eventually turn.”

Thanks,

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