A Corporate Strategy For The Uninsured

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In an election year, the statistic always comes up: 43 million Americans have no health insurance.

Usually the debate rages over what government should do about it. This year some of the country’s largest businesses are banding together to try to widen coverage for their workers, ex-workers and dependents.

“In a crisis moment, business owners have seen the light,” said consumer advocate Jerry Flanagan of the California Health Consensus Project, which lobbies for universal coverage.

Some 50 corporate heavyweights, including IBM, (IBM) General Electric, (GE) McDonald’s, (MCD) General Motors (GM) and Textron, (TXT) have agreed to form a health-insurance buying pool for those who aren’t covered.

The pool targets part-time workers, ex-workers whose COBRA has run out, retirees under age 65, contract workers and younger folks who’ve outgrown their parents’ coverage. The group estimates 4 million people might qualify.

The idea emerged last year from the HR Policy Association, or HRPA, a group of about 200 top companies.

The problem of uninsured people worried member firms for a long time. It was bad for workers – and it cost companies money.

Employees without coverage tend to let their illnesses worsen to the point of disaster. The result is more absenteeism, lower productivity and higher turnover.

And if an uninsured worker lands in the emergency room, the hospital shifts the costs to those who have insurance.

The HRPA puts the total cost at more than $95 billion a year.

“It’s a very dysfunctional marketplace,” said Francois de Brantes, GE’s program leader for health care initiatives.

Doing something about it was always politically dicey, however. The HRPA includes users of health insurance and major providers such as Cigna (CI) and Aetna. (AET)

“There were a lot of built-in conflicts,” said HRPA President Jeff McGuinness. “But the intensity (of concern) reached such a level in 2003, everyone said we need to figure out what to do.”

The group created a Health Care Policy Roundtable, which first met in November.

The roundtable faced a task that had been tried before and hadn’t always worked. But McGuinness says this time was different because high-level execs got involved.

“A lot of these coalitions were put together at a fairly high level, and then the benefit managers who run the coalitions have a hard time getting the attention of the senior person,” he said.

The companies decided that by pulling together a huge untapped group of potential customers for the health insurers, they’d be able to bargain the rates down lower than what a lone buyer could get. They’d also be able to pool the risk so high-risk people could afford coverage.

But member firms want something in return from the insurers: transparency. They want information on the quality of specific hospitals and doctors so they know they’re getting the best deal.

The Center for Medicare and Medicaid Services collects that data but doesn’t share it.

“If you think about the way most consumers today shop for doctors and hospitals, they don’t really shop,” de Brantes said. “They sign up for a health plan. We’re trying to make sure that whichever plan ends up the winner has those core principles (of quality) designed into the benefit offering.”

Power In Numbers

Big firms have the weight to move equally enormous health maintenance organizations, Flanagan says. Your average consumer doesn’t.

“Health care is really a seesaw,” he said. “Whoever’s the biggest has the leverage.”

De Brantes, who served on the roundtable, says most insurers he talked to were friendly. Both parties feared if they didn’t get organized, the government would step in.

“Then you get into mandates, which are suboptimal for everybody,” de Brantes said.

The roundtable first announced its plan March 5. Since then, it’s been rounding up more companies to participate. On May 14 the HRPA went to the media, hoping to drum up more interest and answer questions and concerns.

McGuinness says the coalition continues to build, adding a new company every two or three days.

Many details have yet to be hammered out. The focus now is on building the coalition to generate more bargaining weight.

Participating companies haven’t promised to actually pay for any added coverage. McGuinness said the group is “in a learning process.”

Companies ultimately should offer a range of benefit plans to match the diversity of the consumers, De Brantes says.

“The idea is to create a series of options under a single umbrella,” he said. “Any one individual should find something that fits (his) pocketbook.”

The group looks to have the plans in place sometime next year.

Consumer Watchdog
Consumer Watchdoghttps://consumerwatchdog.org
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