Analysts at Vericred think they can see where cost differentials will push small employers toward, and away from, the new individual coverage health reimbursement arrangement (ICHRA) programs
Vericred is a New York-based company that gathers and sells health care provider data and health plan data, and related tools and services.
The company’s analysts have sketched out their vision of the ICHRA market map in a collection of interactive cost-differential maps, where tan counties look great ICHRA opportunities and blue counties look ICHRA-resistant.
- An interactive version of the Vericred cost-differential map collection is available here.
- An article about how the ICHRA rules will work is available here.
In the states with the most vibrantly tan counties, “an employee would likely pay less on the individual market compared with the small-group market,” according to the Vericred analysis. “This, obviously, makes such a transition more appealing.”
In the bluest states, small-group coverage appears to be a better deal than individual coverage, and employers there would probably be more inclined to stick stock with traditional group health coverage, according to the Vericred analysis.
U.S. health benefit plan designers have dreamed for decades about finding ways to help employers give workers cash the workers could use to buy their own individual coverage.
Cash-for-coverage designers often ran into a serious obstacle: Most states let insurers use medical underwriting to reject applicants with serious health problems or charge the sicker applicants higher rates.
Cash-for-coverage program designers had to figure out how to recruit health coverage issuers that would be willing to do without medical underwriting.
The Affordable Care Act (ACA) eliminated the medical underwriting obstacle starting in January 2014. But officials in the administration of former President Barack Obama developed statute and regulation interpretations that discouraged use of cash-for-coverage arrangements, because of concerns that the arrangements would destabilize the market for traditional, fully underwritten small-group coverage, by luring the employers with the youngest, healthier workers out of the traditional group health insurance risk pool.
Under President Donald Trump, the federal Employee Benefits Security Administration, the Internal Revenue Service and the U.S. Department of Health and Human Services have developed new regulations that encourage use of a new type of HRA, the ICHRA, to give employees cash for coverage.