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Is Portable Health Insurance the Future?

Is Portable Health Insurance the Future?

An idea rapidly picking up steam

While he was running for Senate in the 2012, Ted Cruz spoke extensively on the virtues of portable health insurance — insurance not associated with any particular employer, but insurance that works more like vehicle insurance or homeowner’s insurance.

Though the idea is not unique to Senator Cruz, in a world where Obamacare is causing premiums to sky rocket, coverage to lessen, and government-sponsored co-ops to flop, portable health insurance is becoming a frequent visitor in health insurance reform circles.

“More insurance plans will move with the person, not the job. That’s real health security,” said Speaker Ryan recently, explaining his new health care proposal. “This is not the twentieth century where you have the same job for your entire career, your entire life. You move around, you bounce around. We want to have a twenty-first century system that’s portable with the person.”

Portable benefits might just have bipartisan support. Even Hillary has preached about their worthiness. In her version, these portable benefits are expanded beyond health insurance.

Perhaps it should not be surprising that we are starting to hear politicians such as Hillary Clinton talking about the idea of “portable benefits.” Under this idea, independent workers could pay into a pooled resource that would provide them with the benefits that traditional employees get, such as health insurance and a retirement plan. Robert Reich, former Labor secretary, similarly, has been speaking about the need for income insurance, to help independent workers who don’t qualify for unemployment smooth out unsteady income, as well as portable benefits.

Would portable benefits work? Forbes Contributor, Elaine Pofeldt, interviewed Gene Zaino, president and CEO of MBO Partners. His company has offered portable benefits for more than a decade with great success:

Self-employed professionals who opt to use a shared corporate structure with MBO Partners get access to services such as invoice collections, expense management, business insurance, quarterly tax administration, and benefit plans, such as a 401(k) and access to group health insurance. Those who opt to keep their own corporate structure can obtain a solo 401(k) through MBO Partners, as well as individual health insurance. In either case, they can hold onto these benefits as they move from project to project, regardless of which client they are serving.

Because Zaino has already been able to offer portable benefits, he is confident that they could be offered on a larger scale. “This is all doable,” he says. “If we want our government to give this away to people, that’s a political decision. It can certainly be orchestrated through existing knowledge and technologies for people to have their own portable benefits.”

But the real challenge, Zaino notes, is that many independent workers are not aware of what traditional benefits for workers actually cost and don’t factor that into what they charge for their services. “If people understood what these things cost they would either not take the project or want more money for it,” says Zaino.

Even if the self-employed are aware, they may not be able to compete effectively for new business if they price their services to reflect what they actually would have to pay to buy a traditional suite of benefits they might get at a corporate job.

“We need to be careful in this self-employed gig economy,” says Zaino. “Where people are doing work that is commoditized, like driving a car or walking a dog, there is a risk of the market driving down the pay in a race to the bottom. Just like there is a minimum wage, there may need to be some minimum that people should be getting paid on some of these things.”

Follow Kemberlee on Twitter @kemberleekaye

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Comments

Health insurance…like anything we may wish to buy…is not rocket surgery.

Let the markets work. They will perform the magic they always tend to perform, that magic that totally dumbfounds Collectivists.

buckeyeminuteman | September 6, 2016 at 3:12 pm

People responsible for their own retirement and healthcare planning? What a novel idea! But then if people weren’t dependent on the government to solve all their problems, they wouldn’t need politicians from either party and that would put the Washington Cartel out of business…

Never needed an employer to be the middle man for car, house or life insurance, so the employer shouldn’t have been involved with selecting health plans for employees either. That’s what played into making the whole pre-existing condition worse. The the gov violated the commerce clause by preventing the sale of insurance across state lines. Then the fed gov in its infinite wisdom decided what we all needed to have in a plan no matter what we really wanted to have or afford.

If they take the ball and run with it there is a lot of evidence to show we’ll all get higher quality, lower costs, and benefits that are tailored to our needs.

No less than Harvard economist Dr. Michael Porter studied this a dozen years ago; healthcare runs best when all the usual laws of business and supply & demand prevail.

Get rid of everything ‘Federal’ and ‘National’ and let each State come up with a minimum benefits package, let consumers decide which value (combination of price and quality) they want, and you can have a 25 page document that is cheaper and better than anything we’ve seen in the last 40 years. Let’s do it!

    “Get rid of everything ‘Federal’ and ‘National’ and let each State the market come up with a minimum benefits package, let consumers decide which value (combination of price and quality) they want…”

    FIFY

People should be allowed to associate just for the sake of getting health insurance. I join some group and we as a group can get health insurance rates lowered.

Employment offers a nice attractive benefit of health insurance at a discount to recruit employees.

There’s still nothing wrong with that, as long as it is free market, and not mandated by Oblammocare. Further, zerocare has reduced the quality of these private benefits by constraining insurers with high risk plan mandates.

2nd Ammendment Mother | September 6, 2016 at 7:25 pm

It only works if people get to choose the kind of policies they want no mandates and pricing realistically based on the patients use profiles. I haven’t needed maternity coverage in 20 years, but I loved having a yearly eye exam. Under Obamacare, I got maternity benefits, lost my eye exams and my premiums shot through the roof. So, I’ve stretched my eye exams out to every couple of years. And the hubby and I rarely ever visit a Dr – maybe every 4 or 5 years.

The fact that it is not currently portable should shock people.

    gibbie in reply to Same Same. | September 6, 2016 at 8:45 pm

    In case anyone is unaware, the connection between health insurance and employers was an “shocking” unintended consequence of Nixon’s wage/price controls.

    http://www.u-s-history.com/pages/h1689.html

      Milwaukee in reply to gibbie. | September 7, 2016 at 12:55 am

      Damn gibbie.
      You had me for a moment.
      “gibbie
      In case anyone is unaware, the connection between health insurance and employers was an “shocking” unintended consequence of Nixon’s wage/price controls.”

      I followed the link. It wasn’t that notorious big-government guy, Richard Milhous Nixon to blame, but the stealth socialist, Franklin Delano Roosevelt, in 1942.

      What a coincidence! Franklin had health problems, like Wilson and Hillary, which were hidden from the public. Now Hilary just wants to hide her health problems.

      The problem in many states is that liberal legislatures have passed mandates. If the state decides breast cancer is a problem, then everybody pays to support the required breast cancer policies. I suppose, since well formed breasts are a pleasure to look at, we should support this as well, especially if we support breast re-construction surgery after the breast cancer.

        I wasn’t trying to “have you”.

        I think perhaps you missed the point.

        “The Emergency Stabilization Act was passed in October 1942, which placed wages and agricultural prices under control. There were immediate wage restrictions, and in order to attract labor, the employers offered a range of such fringe benefits as pensions, medical insurance, paid holidays, and vacations. Because the foregoing were not paid out in cash, they did not violate the wage ceiling. Controlling output proved easier than controlling wages.”

        The Emergency Stabilization Act was clearly not during Nixon’s tenure, however the Economic Stabilization Act was.

        https://en.wikipedia.org/wiki/Economic_Stabilization_Act_of_1970

        They were both wage and price control measures, and both produced an environment in which the only way for employers to attract employees was to offer benefits such as health insurance.

        Wage and price controls (including minimum wage laws) are a bad idea. They have perverse consequences. No matter who implements them.

        What do you disagree with about that?

          Milwaukee in reply to gibbie. | September 7, 2016 at 8:17 pm

          “I think perhaps you missed the point.”

          No, I got your “point”, that wage and price controls distort the market and have a deleterious effect on free markets. However, I am sure you missed my point. Health benefits started under Roosevelt as a way to get around his wage and price controls.

          Nixon’s wage and price controls were also a bad policy. We can hang a number of big-government-bad-policy items on Nixon. Health insurance tied to the employer, which started with Roosevelt, isn’t one of them.

          “In case anyone is unaware, the connection between health insurance and employers was an “shocking” unintended consequence of Nixon’s wage/price controls.” That was you, wasn’t it?

‘your account if you can pay, and a support floor if you can’t.” is how it works for rich people whatever the official programs say. Why shouldn’t we all have that same option, rich or not? Your insurance and we’ll cover the cost of a basic coverage product if you’re in dire straights.

While we’re dreaming, “A concierge doctor plus major medical” is more or less what rich people have. Multiple practices were innovating to provide that to “regular folk”, before the law to codify everything in health care … which turned out to benefit the folks in the room when it was written. Non of them regular folk.

Shocking, that. Twice.

BTW, there are several “employer of record” services for giggers that allow you to pay your own bennies, through negotiated group rates. I use Solo Workforce. (Seems fair to mention, since one of their competitors got a plug above.)

The other trick is most Chambers of Commerce in the US allow purchase of “insurance” products for members at group rates negotiated for the chamber membership as a whole. This was one of the tricks in securing health care – negotiated rates for big enough “groups” were way less than individual purchases. Group participation negates the adverse selection problem.

Somehow, that law has made bigger, mandatory purchasing groups – entire states, the whole country – while the prices have gone up. Clever, that.

Anyway, chambers usually have a solo practitioner membership, that gets you access to the group HC rates. (They do similar things with training & other services.)

This is all probably illegal, a destroyed market or both, now. It’s almost like they intended to blow up even the obscure fractions of the market where people were making their own choices, and aware of both service levels and costs.

Nah. That’s crazy-talk.

If McCain had beaten Obama, we’d already have this. This is what he campaigned on.

The essence of it is to offer the same federal tax credit to individuals, which could only be used to purchase health insurance, that the federal govt currently gives to employers that purchase our insurance for us.

Leave in place the current employer based tax credit so the change would be gradual and voluntary.

We would ALL be able to buy our own insurance in a free market, rather than being chained to our employer dependent on benefits.

Insurers would have to compete for our business, the way car insurance companies do, resulting in lower prices and enormously more choices available.

    gibbie in reply to Aarradin. | September 7, 2016 at 12:30 pm

    Heh. For car insurance in Orlando we definitely do not have lower prices and enormously more choices.

    What’s the health care equivalent to “getting people to stop driving as if they are insane”?

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