Non-insurance health care alternatives: Building broker business and helping overlooked populations

Because of rising health care expenses, many employers elect to offer their employee populations high deductible health plans (HDHPs), which provide unattractive benefits because of the expenses involved. According to Kaiser Family Foundation, the average premium for family coverage has increased 22% over the last five years and 54% over the previous 10 years. These premiums have significantly outpaced the growth of workers’ wages and inflation during that same period.

With premiums escalating for every family member added to a health plan, even employees with health coverage through their employer often can’t afford to cover their dependents.

These uninsured dependents have previously been viewed as an unserviceable population, but benefits brokers can utilize non-insurance health care alternatives to provide usable benefits to a population that dearly needs them.

Families are falling through the cracks

The snowballing cost of health care is leaving widening coverage gaps for families in places you may not expect. It’s no surprise that families below the poverty line struggle to find health coverage, but middle-income families making as much as $73,000 per year are also fighting to insure their children. According to a Children’s Hospital of Philadelphia study, insurance rates increased by double digits from 2008 to 2016 at many private and public-sector businesses. Even when employees are fortunate enough to be insured through their employers, their children are often still priced out of adequate coverage.

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The problem is further exacerbated at small businesses, which tend to have more expensive health benefits because they don’t have larger corporations’ leverage to negotiate lower rates. Many small businesses that aren’t required to offer benefits under the Affordable Care Act (ACA) offer no coverage at all. It’s not that these employers don’t want to offer health benefits and other perks to their workforce; they simply can’t afford to.

Unfortunately, the pandemic has also added more fuel to the fire through record unemployment. COVID-19 has made millions of workers vulnerable to the loss of their health insurance. Employer-sponsored insurance is the most common form of coverage, so sweeping job losses have led to millions of uninsured workers and dependents.

COBRA coverage for an individual is expensive for both the employee and employer. Covering a spouse and dependents is not even an option for most unemployed, as the cost is simply too prohibitive.

Non-insurance alternatives

Contractors, per diem workers and part-time employees are also often overlooked when it comes to health coverage. Many employers either offer no health care benefits for these groups or the coverage is subject to extreme limitations. By providing the right non-insurance options, a discerning broker can help families, as well as these neglected employee groups, get the coverage they need while increasing their own book of business.

One alternative is direct primary care (DPC). It’s not only filling in coverage gaps for dependents, but is also an exceptionally beneficial option for part-time employees or contractors who need everyday care. Direct primary care has also grown in popularity because it can be offered to laid-off or furloughed workers who have lost health insurance through their employer.

Employers large and small favor DPC because it doesn’t generate insurance claims. This health membership requires no monthly premiums or deductibles. Members pay a low monthly fee for unlimited access to primary care and the membership often includes in-office visits, telemedicine and virtual visits, making it an especially effective strategy during the pandemic.

Meaningful coverage for everyone

For employees on HDHPs, direct primary care offers an economical way to cover spouses and children. A primary care provider can often provide the necessary care to prevent further disease states and eliminate the need for visits to specialists or more expensive care in the future.

Another non-insurance alternative that brokers can add alongside direct primary care is a critical illness plan. Even with excellent medical insurance, one critical illness, such as a heart attack or stroke, is a monumental expense that will quickly exhaust savings. By putting a critical illness policy in place, you are protecting employees from financial hardship, as heart attacks, strokes, cancer and other unexpected conditions can become a tremendous financial burden to any family. Some chronic diseases are exempt from critical illness coverage, so it’s a great companion to DPC, which offers chronic disease management for several common disease states.

Prescription plans also provide relief to families with HDHPs or DPC memberships. While prescription discounts are often part of a direct primary care membership, offering a prescription discount plan to those with traditional health insurance can soften the blow of escalating medical expenses.

When paired together, direct primary care with critical illness and a prescription discount plan can provide quality health care for day-to-day life without generating claims that impact an employer’s bottom line. Even laid-off workers can avoid expensive monthly premiums and costly claims for employers by opting into DPC instead of COBRA for primary care.

Servicing the unserviceable

Many brokers have populations within their existing book of business that are unserviceable for various reasons. When non-insurance alternatives are implemented alongside an existing health plan within client groups, brokers can open the door to capture the previously missing population.

Even before the pandemic, the cost of providing quality health care for the workforce was a significant challenge for employers. And even families above the poverty line often fall between the cracks when it comes to covering dependents.

COVID-19 has unleashed an ongoing economic contraction that is stripping millions of Americans of their employer-sponsored health coverage. While COBRA coverage is an option for the newly uninsured, experience indicates many displaced workers can’t afford this choice. Talk to clients about primary care for dependents, contractors, furloughed, and part-time workers. By offering non-insurance alternatives like direct primary care to these groups, benefits brokers can emerge as industry leaders. Clients are looking for new solutions and want advisors who help them save money by thinking outside of the traditional insurance box.

Charlie Geiselhart is the chief revenue officer of Healthcare2U, a nationwide hybrid direct primary care organization.