Thatch

Both political parties have influenced a long history of healthcare legislation in an attempt to simplify the system. Despite nearly a century of evolving policies, how did U.S. health coverage get this bad? 𝗧𝗵𝗲 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗿-𝗦𝗽𝗼𝗻𝘀𝗼𝗿𝗲𝗱 𝗠𝗼𝗱𝗲𝗹 Healthcare in America wasn’t always this complex. That changed when economic crises like the Great Depression and wartime wage freezes in the 1940s led to the creation of employer-sponsored insurance—tying healthcare to jobs and complicating access for those who don’t have traditional employment. 𝗔𝘁𝘁𝗲𝗺𝗽𝘁𝘀 𝗮𝘁 𝗥𝗲𝗳𝗼𝗿𝗺 Over the years, various efforts to reform the healthcare system include Richard Nixon's 1970s proposal for universal coverage through HMOs, which failed to gain support. The Clinton administration's 1990s plan for universal healthcare aimed to mandate coverage for all Americans but also failed. On the other hand, there were landmark moments like the creation of Medicare and Medicaid in the 1960s and the Affordable Care Act (ACA) in 2010 which expanded access to healthcare, but also introduced new layers of complexity for both employers and employees. 𝗪𝗵𝗲𝗿𝗲 𝗗𝗼 𝗪𝗲 𝗚𝗼 𝗳𝗿𝗼𝗺 𝗛𝗲𝗿𝗲 Recent developments have been more promising. They’ve been focused on expanding HRAs and introducing Individual Coverage HRAs in 2020. This shift moves away from traditional employer-based models, and instead creates products tailored to individuals, fosters competition among insurers, and empowers businesses of all sizes to offer quality healthcare benefits. While progress has been made, the road to a simpler, more accessible healthcare system is still a work in progress.

How can employers offer more personalized and flexible health benefits? Chris Ellis and Adam Stevenson, cofounders of Thatch, recently joined a16z’s Julie Yoo and Jay Rughani to discuss how they help employers offer tax-free dollars to employees through ICHRA (Individual Coverage Health Reimbursement Arrangement) allowing employees to choose their own health insurance instead of being restricted to a traditional group plan. Listen on Raising Health: https://lnkd.in/gDsSht2a

I met with the founder of a public company in the health insurance industry, worth billions. He told me what he thought was the most disruptive thing to happen in healthcare: ICHRA. What’s ICHRA? It's a terrible acronym - Individual Coverage Health Reimbursement Arrangement (ICHRA) - but a powerful concept. Instead of employers selecting medical benefits for their employees, employers can reimburse employees for individual health insurance premiums and medical expenses that they choose. Here are 3 ways it’s shaking up the industry: 1. 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹𝗶𝘇𝗮𝘁𝗶𝗼𝗻. Traditional group health plans force employees into a one-size-fits-all model which don't meet the varied healthcare needs of a diverse, dynamic workforce. ICHRA enables employees to choose health plans that align with their own circumstances and health conditions. 2. 𝗖𝗼𝘀𝘁. Businesses can actually predict healthcare spend because through ICHRA, they set fixed monthly budgets for employee reimbursements. Meanwhile on traditional plans, costs can unpredictably skyrocket year over year. Rates on average may go up 20-30% but I've seen renewal hikes as high as 70%. 3. 𝗖𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝗼𝗻. As more companies adopt ICHRAs, the pool of people in the individual market will increase, which spreads the risk over a larger group. As risk goes down, so should premiums. Over time, we’ll continue to better coverage at lower prices, along with new entrants. It's happening fast, too. P+L leaders at major insurance companies told me that in 10 years, ICHRA could be the default way most Americans get healthcare.