Traditional Group Health Insurance vs Individual Health Insurance
Comments By Joe Markland on Linkedin
If individual’s get to choose plans in local markets you will see that the BUCA’s do not have the same power. Individuals will not mind smaller networks in exchange for cost savings. They don’t care about brand, though in their local markets local HMO’s do carry weight. Individuals will buy different from an employer who needs “BIG” to cover a broad population often across State lines. Most don’t need to “pre-pay” for oil changes.
So if you are going to complain about BUCA’s everyday, then you need to start favoring a move away from employer-based insurance. If not, then stop complaining.
When you buy individually you are part of the largest risk pool in the market. The individual carriers are now doing the same cost containments things the self-funded or captives are doing. They have more leverage than any employer.
It changes the entire competitive dynamics of the marketplace. For example, BC in Massachusetts has 65% of the group market but less than 5% of the individual market. Consumer behavior is different from employer that plays into the BUCA’s. I will stick by my argument and say to reduce BUCA power you need to get employers out of the middle. We are already seeing this play out in markets. The root cause of the problem is employer-based insurance. I have done analysis on close to 1000 employers and I see the markets changing. New plans are already being built by those planning for this market change. Change who the buyers are and markets change.
Employers don’t have enough leverage to change the system. Haven showed that. I do believe individuals, if employer got out of the middle, would have more leverage. I actually think I do and I buy individually. It works. It works for cars, food, entertainment, and many other products. To assume to that a consumer Health market would not provide the same competitive forces as when buying a car is a a wrong assumption.
