Individual Insurance Health Reimbursement Arrangements (ICHRAs) are growing, but relatively slowly. They allow employers to provide tax-free funds to employees so they can purchase their own individual health insurance plans.
During Monday's session at the HLTH conference in Las Vegas, Centene CEO Sarah London shared her thoughts on ICHRA, calling it “the future of personal health insurance.”
“For me, the basic paper [of ICHRA] “Whether it's health insurance or health care consumption broadly, there's a belief that individuals need more and more agency in their health care journey. They want to get services quickly and conveniently,” she said.
ICHRA allows employees to choose the plan that works best for them, she added. Companies with thousands of employees may have only a few health insurance options compared to traditional group insurance.
She noted that Centene actually plans to offer ICHRA to all employees in Indiana in 2026, while London will join the individual market in person to test the option.
“Think about me. I'm a 45-year-old woman who's relatively healthy. Until Saturday, I hadn't been to a doctor this year, so I can tell you that the amount of health insurance I'm paying for far exceeds the actual cost of the care I need,” she said, noting that through ICHRA, she can purchase more customized, more affordable insurance products on an individual exchange.
Session moderator Christina Farr, managing director of consulting firm Manatt Health, noted that there isn't much data yet on how many people are actually currently enrolled in ICHRA, but London said it could be in the hundreds of thousands.
ICHRA is based on legislation introduced during President Donald Trump's first term, and momentum may have been “stymied” during the coronavirus pandemic, she said. That said, ICHRAs are growing, primarily among smaller companies that were previously unable to offer health benefits, while larger employers are more skeptical.
“I think you can safely say it's going to be a drip, drip, flood. The real question is, when and what factors are driving this shift? … I do think some of the more established companies need to step in,” London said. “We certainly need the infrastructure. We need startups in this space to really step in and make sure that the navigation experience, the buying experience, the life experience that ICHRA manages is as seamless as possible, and that will help drive momentum.”
However, it is worth noting that not everyone is so optimistic about ICHRA.
“I really wonder if any of these ICHRA evangelists have ever purchased a personal health plan?” Ari Gottlieb, principal of consulting group A2 Strategy Corp, said in a LinkedIn post. “They often find that these plans have limited Medicaid-based provider networks, most of which lack out-of-state coverage and do not include leading health systems.”
Photo: HLTH Inc.
