When we set out to create a new and different way for Americans to pay for healthcare, we had you and your best interest at the top of our minds.
Those minds have since been boggled by some of the crazy, dysfunctional things we’ve learned about health insurers along the way. Where we first thought it might be an uphill climb to help people like you imagine getting out of the health insurance system, now we realize it’s actually one of the biggest upsides we can offer you, our CrowdHealth Members.
That’s why there’s no shame or secrecy here about the fact that we aren’t health insurance, and therefore we can’t legally make the same “guarantees” insurers do.
Curious what we could possibly mean by these as “good things”? Read on!
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 incentivizes 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) To function and stay in business, 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. Therefore, these networks are extremely valuable to health plans. Once they get a hospital system under contract, they don’t want to lose it from their network; to keep the network size, they must keep their providers happy, so they forfeit their ability to negotiate well with the hospital systems. This gives the hospital systems the power, so they can continue 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).
At CrowdHealth, 100% of our revenue is generated from reducing your costs -- either from growing the number of people using CrowdHealth and spreading costs over a larger Crowd, or from negotiating with hospitals and doctors to dramatically reduce prices for the Crowd.
It’s different, and it’s definitely not insurance. But like we said, we think that’s a really good thing! And we hope you see the difference, too.
Part of not being an insurance company also means we can’t legally guarantee your bills will be paid. So, then:
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. 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 legally guarantee payment of your bills, we have plans and processes in place that are set up to protect our Members and help you pay for the medical care you need. We have clear guidelines for what you can expect to be eligible for funding by the Community, transparent pricing and revenue structures so you know we aren’t incentivized to line our pockets with cash that should be yours, and financial processes that allow the Community to absorb and fully fund very expensive bills. We are seriously committed to you, our Members, and are confident that the number of healthcare bills that will go unfunded will be very, very small, if anything at all.
We’re here for you, our Members, always; and we think that’s a really, really good thing for us all.