Why this insurer designed health plans with no deductibles or copays

Why this insurer designed health plans with no deductibles or copays

Just because an employee has a health plan doesn’t mean they are guaranteed affordable care. Depending on their deductibles, copays and out-of-pocket maximums, employees may have to spend thousands, if not tens of thousands of dollars, on healthcare in a given year.

This health insurer wants to change that narrative.

Curative is a Texas and Florida-based plan provider that offers zero-dollar copays and deductibles for in-network care as long as members complete an appointment with a Curative clinician within the first 120 days of their plan going into effect. Otherwise called a baseline visit, these appointments are designed to introduce members to their new plan and break down possible preventative care needs.

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The plan design is a response to the growing popularity of high-deductible health plans (HDHP) among employers and the subsequent reduction in preventative care visits, underlines Fred Turner, co-founder and CEO of Curative. An HDHP typically has lower monthly premiums, but members may pay a deductible of anywhere between $1,600 to $7,000 for their healthcare services before the insurer begins sharing the cost of care.

“We are trying to help people who haven’t seen a doctor in five or ten years, who don’t want to pay $100 just to see a doctor,” says Turner. “Unfortunately, this is a very common mentality. We are trying to show those members that they can now get care for $0 and get them engaged with preventive care.”

Turner believes that ultimately HDHPs are a failed experiment. He points to a study by the National Bureau of Economic Research, which found that when a group of employees went from almost no deductible to a high deductible, there was a 12% to 14% drop in demand for healthcare services, including preventative care. And while employers may save money in the short-term due to lower premiums and lower rates of healthcare spending, HDHPs can have costly consequences over time, says Turner. 

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“All of that reduction comes from people just skipping preventative care: They don’t get a colonoscopy, mammogram, physical, vaccines or medication they need,” he says. “Then you see an increase in preventable diseases — all the things that could have been dealt with in a primary or urgent care setting are now becoming ER visits.”

And yet, according to healthcare research nonprofit KFF (formerly known as the Kaiser Family Foundation), the number of workers enrolled in HDHPs went up by 10% from 2010, with a third of employees now covered by HDHPs. For Turner, there is at least a partial correlation between the rise of HDHPs and how much the U.S. spends on preventative diseases, with its latest estimate falling at $730 billion in 2016 alone, according to peer-reviewed journal The Lancet. 

The goal of Curative’s health plan is to decrease total healthcare spend over time by financially incentivizing people to get preventive care. Notably, if a member does not attend their baseline visit within their deadline, their deductible jumps to $5,000. According to Turner, 98% of their members complete their preliminary visit. 

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“We wanted to design something where we actually make that upfront investment in people’s care, get them to engage early and keep them healthy for the long term,” says Turner. “We think the only way to drive that engagement is to remove the financial barrier.”

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Turner emphasizes that Curative does take on the risk of increased costs in the first year for employers, meaning companies will not see a spike in their spending under the new plan. Employers can choose between three plans that vary in out-of-network provider coverage, with premiums Turner claims are 10% lower than industry standard plans. 

Regardless of whether employers choose a provider like Curative, Turner advises companies to seek out alternative plan designs. As healthcare prices continue to rise, employers may have no other choice.

“Einstein’s definition of insanity is doing the same thing, again, expecting a different result,” says Turner. “Employers have been trying the same plans for decades and getting a 15% to 20% increase every year, while your employees spend thousands out-of-pocket for care. They need to be willing to try a different approach.”