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CrowdHealth Isn’t Health Insurance and Can’t Guarantee Payment… and Why That’s a Good Thing!

Published on
October 1, 2021
Originally published by on Oct 01, 2021

Why am I better off with CrowdHealth not being insurance?

In short, you’re better off with CrowdHealth not being insurance because there are so many backward incentives and structures within health insurance that actually increase your prices and negatively affect consumers. Here are two key ones:

1. Did you know that the United States government limits the amount of profit health insurance plans can receive from your premiums? That sounds great in theory, but think about it this way: if a health plan can only make profits on up to 15% of your premium, and you have a $1000 premium per month, their profits are limited to $150 per month on that price. So then, what’s a major way health plans can grow their profits? By increasing your monthly premiums! If they boost your premium by 10% to $1100, they can now profit $165 per month. This means health plans are now incentivized to make your prices go up, not go down.

2. Health plans rely on extensive contracts with doctors and hospital systems in your city. If health plans don’t have networks, then they are unlikely to sign up big companies in your city for their plans, because no company wants a health insurance plan that has super limited options on doctors and hospitals. These networks are extremely valuable to health plans; to keep the network size, insurers must keep their providers happy, and they forfeit their ability to negotiate well with the hospital systems. This gives the hospital systems the power to increase their prices to insurers, which leads to an increase in health insurance customers’ prices, which then increases the health plan profits (see point #1).

How is it a good thing that you cannot guarantee that all my bills will be paid?

Well, if we were to guarantee payment, then we would be considered health insurance. (See above why we think being health insurance is a bad thing, for us and for you.)

But here is the oddity of insurance:
Regulators give insurance companies a green light to say they guarantee payment even though, according to the Kaiser Family Foundation, 40 million claims were denied in 2019 [1]. That’s 17% of in-network claims from plans that are sold through healthcare.gov!

That means if you have a health plan through healthcare.gov, you have a nearly 1-in-5 chance of your claim being denied.

Health insurers get away with guaranteeing coverage, but they aren’t living up to their word. They make it sound like you can trust them, but in reality, they’re leaving millions of Americans with huge, unexpected bills each year!

That’s the opposite of what we stand for at CrowdHealth. So, yes – while we cannot guarantee payment of your bills, we have plans and processes in place that are set up to maximize the probability of your bills getting funded. We have clear guidelines for what you can expect to be eligible for funding by the Community and transparent monthly contributions and revenue structures, so you know we aren’t incentivized to line our pockets with cash that should be yours. We are seriously committed to you, our Members, and are confident that the number of healthcare bills that could go unfunded will be very small.

We’re here for you, our Members, always; and we think that’s a good thing for us all.

[1] www.kff.org.

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