3 Employers, 2 Wonks and 1 Health Insurance Mess (LIVE!)
May 13, 2021
Art by Leslie Walker
Employers are likely to continue playing an outsized role in the U.S. health care system for the foreseeable future. So how can the insurance they offer be made more affordable and accessible for more Americans?
(This episode was recorded live as part of a virtual conference hosted by the University of Pennsylvania on May 7, 2021.)
Listen to the full episode below, read the transcript or scroll down for more information from this live event.
This episode was recorded live as part of “The Promise of Health Reform and a Public Option in a Biden Administration,” a virtual conference put on by the Leonard Davis Institute of Health Economics at the University of Pennsylvania and United States of Care. Our session gathered policy experts and employers to discuss how to make employer-sponsored insurance work better for more Americans. The speakers were:
- Brian Blase, PhD, Senior Fellow, Galen Institute
- Suzanne Delbanco, PhD, MPH, Executive Director, Catalyst for Payment Reform
- Allison Hoffman, JD, Professor of Law, University of Pennsylvania
- Shaundell Newsome, Co-Chair, Small Business for America’s Future
- Sheila Savageau, U.S. Health Care Leader, General Motors
More than 150 million Americans get health insurance through their employers. Nearly three-quarters of the roughly 30 million Americans who remain uninsured have at least one person in their household working full time, suggesting employers could do more to expand coverage.
But employer-sponsored insurance has numerous shortcomings that limit its effectiveness:
Two Potential Policy Fixes
As part of the live event, the authors of two different policy proposals for the employer insurance market each pitched their idea to a “disgruntled employer” (played by Tradeoffs sound engineer Andrew Parrella). Watch those pitch videos below for an overview of each idea, and read on for more details.
Employer Public Option
This proposal was presented at the event by University of Pennsylvania law professor Allison Hoffman. It is based on an academic paper coauthored by Hoffman, Howell Jackson and Amy Monahan. Their idea is for the federal government to offer employers a public option plan modeled on traditional Medicare with a few tweaks. The plan would be optional, but if an employer chose to offer it then they could not offer any other plans.
Handing over most of their insurance responsibilities to the government could save employers time and money, but they would sacrifice control and the ability to customize very generous plans to compete for talent. This proposal would also likely face fierce political opposition from providers and insurers.
Individual Coverage Health Reimbursement Account (ICHRA)
This proposal was presented at the event by economist Brian Blase, who is a senior fellow at the Galen Institute and the Foundation for Government Accountability. In 2019, the Trump administration issued federal rules turning this idea, known as an individual coverage health reimbursement arrangement (ICHRA), into a real option available to employers. Early uptake has been slow, but 15% of employers in one survey said they plan to offer an ICHRA in 2022 or later.
ICHRAs allow employers to set aside a fixed amount of tax-free money for employees, who then use those funds to shop for coverage on the Affordable Care Act (ACA) exchanges.
ICHRAs provide more predictability for employers and more choice for employees but they put more of an onus on employees to shop smartly for their insurance, which research shows can be hard to do. The affordability and diversity of plan options available to employees depends on the health of the ACA exchanges, which can vary from state to state and year to year.
Want more Tradeoffs? Sign up for our weekly newsletter!
Related Research and Reporting:
How Corporate Executives View Rising Health Care Cost and the Role of Government (Gary Claxton, Larry Levitt, Shawn Gremminger, Bill Kramer and Matthew Rae; KFF; 4/29/2021)
A Public Option for Employer Health Plans (Allison Hoffman, Howell Jackson and Amy Monahan; U of Penn Law School Public Law Research Paper No. 21-12; 2/17/2021)
The High Price of Lowering Health Costs for 150 Million Americans (Tradeoffs, 2/18/2021)
Integrating Health Savings Accounts with New Health Reimbursement Arrangements (Brian Blase, Galen Institute, 10/15/2020)
Bipartisan Tax-Free Solution To Health Care Financing: Coupling HRAs With A Public Option (Regina Herzlinger, Richard Boxer and James Wallace; Health Affairs; 6/30/2020)
The Trump administration’s final HRA rule: Similar to the proposed but some notable choices (Christen Linke Young, Matthew Fiedler and Jason Levitis; USC-Brookings Schaeffer Initiative for Health Policy; 6/14/2019)
Brian Blase, PhD, CEO, Blase Policy Strategies; Senior Fellow, Galen Institute; Senior Fellow, Foundation for Government Accountability
Suzanne Delbanco, PhD, MPH, Executive Director, Catalyst for Payment Reform
Allison Hoffman, JD, Professor of Law and LDI Senior Fellow, University of Pennsylvania
Shaundell Newsome, Founder, Sumnu Marketing; Co-Chair, Small Business for America’s Future
Sheila Savageau, U.S. Healthcare Leader, General Motors
The Tradeoffs theme song was composed by Ty Citerman.
This event and episode were produced by Leslie Walker and Andrew Parrella.
Additional thanks to Slow Clap Productions, Traci Chupik, Sammi Kerley, the Tradeoffs Advisory Board and our stellar staff!