LAS VEGAS—Employers' healthcare costs continue to rise, leading them to seek new alternatives to drive down expenses while avoiding steps to shift additional costs to workers.
In response, some in the industry have been beating the drum for individual coverage health reimbursement arrangements, or ICHRA. Within this model, employers can provide workers with a tax-free stipend they can put toward coverage in the individual market.
Some of the loudest voices in this conversation have been from insurtech Oscar Health, which operates largely in the individual market. Mario Schlosser, co-founder and chief technology officer at Oscar, said in an interview with Fierce Healthcare at the HLTH conference last month that there's been a groundswell of interest in ICHRA as employers and their human resources teams seek solutions to the cost equation.
But growing this sector does require a shift in thinking, he said. For one, they may not be aware that the individual market, now far more stable than a decade ago, is a competitive space with a group of insurers that have figured out how to make this work.
"I think the other thing is it needs to become a different pitch, perhaps one where the CEO and CFO are involved," Schlosser said.
The ICHRA market is also off of the Affordable Care Act's exchanges, so it's not hamstrung by some of the same limitations that hinder exchange plans, he said. For example, insurers are limited in how many different plan designs they can offer in a region, a change the feds argued would make it easier for potential enrollees to find and select coverage.
For ICHRA, though, those rules are not in place. Oscar offers, for instance, several different types of plans aimed at people with specific common, high-cost chronic conditions, such as diabetes and pulmonary needs. These plans include tailored benefits for those chronic needs, such as lower cost for diabetic foot exams or visits with an endocrinologist.
Schlosser said these products have proven to have significant appeal and that Oscar sees far more members with diabetes choosing the specialized plan over more standardized coverage. The team anticipates that same interest would extend to ICHRA, as employees select coverage that matches their individualized needs.
"I actually think that's a huge benefit of ICHRA," Schlosser said. "If you put a lot more people in a very defined bucket that works for them, you can get at all of this overpricing, over-insuring that is plaguing so much of healthcare."
In addition to the potential around personalization, making specialized plans like these available to more workers could also chip at a major pain point for employers: solution fatigue. Because the plan is built around services for a specific population, the employer doesn't necessarily need to contract directly with as many vendors or solutions to manage these conditions as they may have before.
From the plan perspective, too, as the ICHRA market grows it has the potential to allow a member to stick with the same insurer or plan for the long term. Even if they switch employers, if both are offering ICHRA, they can maintain continuity of coverage, Schlosser said.
It would also enable a plan to monitor trends over the long term. The conversation around GLP-1s is an example of where this would likely be beneficial, he said. It's clear that these drugs do have immediate benefits for weight loss, but the longer-term effects are murky. If a plan can track how these drugs work for a member over years rather than months, it would make it simpler to manage their care overall.
"I think those plan designs and those experiences are exactly where technology gets interesting again," Schlosser said. "In fact, that's actually one thing that I've been trying to tell every startup, digital health vendor, whatever I come across at this conference as well that they need to wake up to this ICHRA opportunity."