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Health insurance on demand?

Despite cumbersome regulation at every level of the healthcare sector, innovation still exists. The next big shake-up in healthcare could be health insurance on demand. Here is how it would work:

It’s a radical idea: On-demand insurance that lets customers buy some of their coverage only if and when they need it, similar to how TV viewers might rent a new release from Amazon instead of paying every month for a pricey cable package they rarely use.

Under Bind’s plan, customers pay a base monthly premium that can be as much as 40 percent cheaper than other options their employer offers, the company says.

That covers most care, like doctor visits, hospital stays, maternity care, cancer treatment and prescriptions.

A patient can then buy additional coverage for some procedures that aren’t urgent like a knee surgery or hip replacement. In these cases, the patient has time to plan for the care and look at different options for who performs it.

The additional coverage comes with an extra premium and possibly a copayment, depending on the care provider and what is being purchased. In these cases, patients might get stuck paying more than $1,000 in additional costs.

Users log onto Bind’s website or app to see what is covered, what it will cost them. That can vary based on Bind’s quality rating for a provider and how efficiently it provides care. Someone with an ear infection might pay nothing for a telemedicine visit. But a trip to an expensive emergency room for such a minor illness might cost a few hundred dollars.

A common problem with healthcare risk pools is that healthy people see very little advantage in obtaining coverage because of the high costs and many unnecessary coverage benefits that the patient will never use. But, what if the patient could choose to pay for and be insured for exactly what they need? That is precisely the scenario that caused one Wisconsin school district to adopt this type of health plan for their employees:

Bind’s plan draws concern from researchers worried about how this may hurt some pocketbooks, but it also has attracted employers hungry for a fresh way to tame expenses.

School superintendent Barry Rose picked Bind as the only coverage option earlier this year for the Cumberland, Wisconsin, school district after cycling through numerous health plans in the last six years. Rose said about two-thirds of his workers use $500 or less in health care every year, and he didn’t want to charge them premiums for care they weren’t using.

“We have quality health care. If people need it, great. If they don’t, at least we’re not soaking them for it,” he said.

Minneapolis-based Bind is not an insurer, but it designs health plans for big employers that pay their own bills.

While current models of care delivery have proven unable to control health care spending growth, new innovations such as health coverage on demand could be major innovative steps in an effort to create a more sustainable health care industry, that produces the healthiest possible outcomes.

Jordan Roberts / Health Policy Analyst

Jordan joined the Locke Foundation in the summer of 2018 as Health Care Policy Analyst. He analyzes state and national health policy issues with an eye toward removing governm...

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