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Fast Company
20-05-2025
- Health
- Fast Company
Health insurance is fundamentally broken. Here's how to fix it from the ground up
It's no secret that when it comes to simplicity and convenience, insurance has lagged behind modern businesses across most industries. While many legacy products have been overturned by newer, intuitive solutions or adapted to meet today's consumers' needs, insurance offerings have remained a complex anomaly—built more for business and regulatory needs rather than real people. We already know that healthcare in America is too expensive, and far too many people simply can't afford to get sick. Health insurance deductibles are at an all-time high, while denied and delayed claims payments persist. Insurance companies have continued making money while a staggering number of people are putting off care because of the cost, or pulling money out of their 401(k) plans early to pay for medical expenses. We also know that there is no shortage of people who are fighting for healthcare policy changes, more accountability around business practices, and broader reform. But consumer patience is running out. And with 100 million American adults in medical debt, incremental regulatory changes won't be quick enough to take on the challenges that so many people face today in affording basic, and sometimes unexpected, costs related to their healthcare. Consumer Sentiment It's time we ask the question: Can we start making progress by rethinking how health insurance products are fundamentally designed? In order to do this, we have to accept some consumer truths about health insurance today. First, more than 50% of Americans don't understand their health insurance. That's because, unlike most other industries that have embraced simplicity and ease, insurance remains complex, filled with exclusions, jargon, and unnecessary paperwork. So even with the best of educational tools, we're looking at a large literacy gap. Second, consumer animosity toward health insurance companies is almost as old as the business itself. Even traditional supplemental health insurance offerings like Accident Insurance and Critical Illness that are intended to provide extra support were not designed to cover very much. And the amount of money that goes back to the insured at the end of the day is low for every dollar of premium paid. So it's not surprising that people are tired of frequent claim denials and delays, and don't trust that their coverage will minimize their out-of-pocket exposure as much as they need it to. It's obvious that we have to start with addressing what's covered, and how we pay claims, which is core to any insurance product. We can't just slap technology onto insufficient coverage and hope that it'll improve consumer confidence and trust. But there are some things we can do today to help health insurance catch up with other consumer industries through human-centered design. Here are three: 1. We can set up insurance products like subscriptions Digital simplification across industries has been happening since the dawn of Amazon and Uber, and has taught consumers to have certain expectations around their apps and online experiences. Just for the purposes of this exercise, let's think about insurance in terms of the direct-to-consumer fulfillment model—and treat insurance like a subscription where care is the purchase and benefits are refunds. Thinking of benefits as refunds enables us to align insurance innovation with the digital simplicity today's consumers expect. By removing the complexity wrapped around benefits, we can make claims intuitive and the delivery of benefits seamless. We have to eliminate the common limitations and restrictions as well as the excessive paperwork and evidence required for claim approval to enable quicker benefit decisions. People should be able to track the status of their claim in real time, so they can stop chasing their insurance companies for answers. Payment should be electronic, and take days, not weeks. In doing this, we can start to replicate the standards of efficiency and transparency people today are accustomed to when they buy and return products, and build a modern insurance experience that meets digital consumers' expectations and needs. Treating health coverage like a subscription also provides clear opportunities for engagement. And insurance companies across sectors are just starting to take note. Beam Technologies tracks teeth-brushing habits through a Wi-Fi-connected toothbrush to tailor dental insurance discounts, while Discovery offers its Vitality Program that rewards customers with points for preventative checkups. By encouraging consumers to engage with their coverage, motivating them to use it by offering rewards and discounts like other consumer businesses, these companies drive utilization and deliver value as a result. 2. We can take an (active) back seat Another school of thought tells us that the best insurance companies are the ones that people don't think about at all. Unlike the previous approach, which assumes consumers will use their coverage like they do their subscriptions, this strategy doesn't expect that the modern consumer wants to interact with their insurance company at all. Instead, it offers a simple promise of value without any participation required. This approach provides obvious opportunities for leveraging data and automation to set up a product experience where the claim end-to-end is managed by the health insurance company, with no necessary intervention from the insured at all. Innovators in the space are just getting started automating several, if not all, aspects of the claims process. Current players like ClaimsMinder, Human API, and Claritev are just beginning to unlock the power of data to streamline the notification, filing, processing, and payment of a claim so that employees can get more out of their benefits. Ansel Health offers 'medical claims integration,' which enables them to determine when individuals have a covered condition and are eligible for a benefit, and pays them directly without requiring them to ever file a claim. In doing this, we eliminate coverage disputes, delayed claims payments, or even just make someone's day a little bit easier—and maybe then begin to build some trust. 3. We can become a logical extension of the modern care-delivery revolution When people get sick, they don't see their preventative care or treatment and their health insurance as two separate entities, but rather one experience. Unlike insurance, modern care delivery has evolved at a rapid pace over the past 25 years. Digital and in-person clinics like Wally, Maven, Tia, Omada, Parsley, and One Medical are setting new standards for the way people experience care, and even legacy care providers are mimicking their practices with apps and more. Notably, most of these providers have chosen to offer subscription-based or up-front payment models and to 'cut out the insurance middleman.' Why? Because it just doesn't align with their promise of simplicity and empathy through the provider experience. By applying human-centered design, we can bridge this gap—creating insurance brands that look and feel like a natural extension of the modern care delivery experience. Companies like Oscar, Rightway, and Sana are already proving this is possible, offering an integrated experience that resonates with today's consumers. It's a fair question to ask, but why will business stakeholders care? A part of it will be about finding a set of believers and innovators who are both mission-aligned and consumer-focused. But it's also important to acknowledge that fixing the flaws in the health insurance experience doesn't just address the financial crisis around healthcare, it aligns with business needs too. In fact, there's a clear business case for creating simpler health insurance products. According to the Integrated Benefits Institute, serious illnesses, when not treated, result in an average of 1.5 billion lost work days per year, costing employers $575 billion annually. When employees don't delay or skip care because they're confident in their health coverage, they're less likely to require sick time, workers' compensation, disability, or family and medical leave. Employers see higher retention, insurance brokers and agencies build deeper trust with their clients, and insurance companies see a higher rate of renewals. Established companies can participate too through partnerships with modern solutions, allowing them to stay competitive in an evolving marketplace, benefiting new, innovative players seeking broader distribution. Our goal is simple: In 10 years' time, we want people to be talking about how complex health insurance used to be, and finally build some real trust.
Yahoo
11-05-2025
- Business
- Yahoo
Pressure is on to extend ACA subsidies as premium hikes loom
May 11—Lise Goddard recently launched her new career as a fabric and stained glass artist — a passion she says she could not have pursued without being able to purchase health insurance on the Affordable Care Act marketplace. Goddard, 54, of Sebago, said she's watching to see whether Congress extends tax credits that were first approved in 2021 and help reduce the cost of insurance premiums, often by hundreds of dollars each month. The enhanced tax credits have reduced premiums for 85% of people on the marketplace, including nearly 55,000 Mainers. But the tax credits are set to expire at the end of the year unless Congress passes an extension. While policyholders and health care advocates are stepping up pressure to maintain the subsidies, they face an uphill battle with Republicans in control of Congress and the White House who have generally been opposed to the ACA. Because of the way the tax credits are structured, those most affected if the enhanced credits expire would be lower-income enrollees earning between 135% and 200% of the federal poverty level, or $31,300 for a single person, and those who earn more than 400% of the federal poverty level — $62,600 for a single person, or $128,600 for a family of four. The enhanced credits shield people from paying more than 8.5% of their annual income on insurance premiums. The enhanced subsidies led to significant increases in the number of Americans insured through the marketplace — more than 24 million people are now enrolled. The Congressional Budget Office estimates that permanently extending the subsidies would cost $335 billion over the next 10 years. While some Republicans have balked at the cost, advocates argue that allowing the subsidies to expire would effectively raise premiums for millions of Americans several months before the 2026 midterm elections. Goddard said she has "extraordinarily good insurance" and pays $130 in premiums per month, which covers her and a 22-year-old son. Her husband, Jeff, is 70 and qualifies for Medicare insurance. If she had to pay hundreds more per month, "that would do me in. I wouldn't be able to continue what I'm doing as an artist." In Maine, the average premium would increase by $2,100 annually, or $175 monthly. But the premium increases would vary widely, depending on a number of factors, such as age, income and geography, as enrollees in rural areas would see higher increases. Some of the monthly premium increases would jump $600 to $700 or more, according to Maine state officials. All together, $26 million in monthly premium savings would be lost in Maine alone if the credits expired, according to state statistics. Goddard said part of the reason she was able to leave her job as a school administrator in 2023 and try to make a living as an artist was the reasonable prices for insurance through the ACA. "The peace of mind, knowing I have this insurance, is important, and it allows me to live the life I want to live," Goddard said. Ann Woloson, executive director of Consumers for Affordable Health Care, a nonprofit advocacy group, said ACA insurance is especially crucial in Maine because of the large number of people who are self-employed, or own small businesses that don't have employer-based insurance. "If you look at our industries — self-employed people, like the fishing industry and lobstering — some people are going to roll the dice and go uninsured if these tax credits go away," Woloson said. Woloson said that would leave those who remain in the marketplace in an insurance pool of older, sicker workers, driving costs up. And people who are uninsured tend to delay their care, also driving up costs with more reliance on emergency department care. System costs will also increase if people use less preventive care and let their health conditions deteriorate before seeking health care, which is also more costly. "What that means is everyone would pay more for their health insurance," Woloson said. Alicia Romac, 57, a real property appraiser who lives in Bath, said she doesn't know what she would do if she couldn't get affordable health insurance through the ACA marketplace. "If the ACA didn't exist, it would stifle entrepreneurialism in the country," Romac said. "To best execute your business ideas, you need to be healthy and have health insurance." Romac said she would like members of Congress — who enjoy a generous public health care plan — to look out for the public as much as they look to preserve their own benefits. "They're willing to cut public subsidies for the ACA, while at the same time keeping their own public subsidy," Romac said. Aaron Child, of Damariscotta, said he has an ACA plan, and as a self-employed arborist who cuts down trees, going uninsured would be "foolish." But if he had to pay hundreds more per month, it would be a hardship. "Something would have to give," Child said. Hilary Schneider, Maine's director of the Office of the Health Insurance Marketplace, said many Maine people will "not be able to shoulder" these premium increases, posing a threat to their health, financial well-being and the overall economy. The agency Schneider runs operates the website, which is where consumers can compare plans and purchase ACA insurance. "These are our friends, neighbors, home care workers, hairdressers, technicians, people who left corporate jobs to start their own businesses," Schneider said. "These are the bedrocks of our communities." According to KFF, a national health policy think tank, a 60-year-old couple living in northern Maine with an annual income of $82,000 and coverage under a so-called silver plan would see premiums increase from $581 per month to $2,420 per month if the enhanced credits expired. The Mills administration is publicly calling on Congress to maintain the enhanced subsidies, and last week, it issued statements and fact sheets to call attention to the potential expiration. Congress will need to decide by the end of the year whether to maintain the credits at the same time it is negotiating many other major pieces of the federal budget, including possible cutbacks to Medicaid that also could leave many Mainers without access to health insurance. Sen. Angus King, I-Maine, introduced legislation in January that would preserve the credits. But whether there's enough Republican support to save the subsidies is unclear. Sen. Lisa Murkowski, R-Alaska, is so far the only Senate Republican to voice support for keeping the credits. Sen. Susan Collins, R-Maine, is against Medicaid cutbacks, but has so far been noncommittal about the enhanced premium tax credits. "Senator Collins voted to protect the Affordable Care Act and she supports making health care accessible for Maine families," said Blake Kernen, a Collins spokesperson. "Senator Collins is considering several tax proposals, and she has questions about how this would be funded while also ensuring Medicaid is protected from cuts." Collins and Murkowski were two of three Republican senators — the other was the late John McCain of Arizona — who voted against their party in 2017 to protect the ACA from being dismantled. But Republicans hold a greater majority in the Senate than they did in 2017 — a four-seat majority now compared to a two-seat majority in 2017 — and also control a majority of seats in the House of Representatives and the White House. The Trump administration has not weighed in specifically on the enhanced tax credits, although President Trump has generally been hostile to the ACA. James Myall, policy analyst for the Maine Center for Economic Policy, said the "ripple effects" of losing the enhanced subsidies will reach far, especially in rural Maine, where there are not as many jobs with employer-based insurance. "This would shrink the state economy," Myall said, also pointing out that it would make the workforce shortage worse. "The No. 1 reason workers who are not of retirement age are not working is because their health is bad." Goddard, the Sebago artist, said not having to worry about insurance made taking the risk of switching careers less scary. "When I looked into it, I thought, 'this is doable,'" Goddard said. "The freedom that it has offered me was a huge factor in my decision." Copy the Story Link
