Latest / Becker’s Payer Issues Podcast / Why ICHRA Is Gaining Momentum With Employers and Public Entities

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Why ICHRA Is Gaining Momentum With Employers and Public Entities · Becker’s Payer Issues Podcast

• 0:02
  This is where health insurance leadership comes together.
• 0:05
  Becker's fourth annual spring payer issues roundtable brings
• 0:08
  together over 400 payer and health plan executives
• 0:12
  and more than 100 speakers to Chicago April.
• 0:16
  This year's event includes keynote conversations with the
• 0:19
  industry's top leaders and former president George W.
• 0:23
  Bush. For the full agenda and event details,
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  visit beckershospitalreview.com
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  and click on the events tab in the
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  upper right. We're looking forward to hosting you
• 0:31
  here in Chicago.
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  Hello, everyone. This is Jacob Emerson with the
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  Becker's Pay Your Issues podcast. Thrilled today to
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  be joined by Jack Hooper, who is the
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  CEO and cofounder of Take Command. Jack, thanks
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  so much for taking the time to be
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  with me on the podcast today.
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  Jacob, thank you so much for for having
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  me on.
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  Excited to talk with you today.
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  Likewise, Jack. Appreciate you taking the time to
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  chat with us. Before we get started, can
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  you first tell the audience a little bit
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  about yourself, your background in terms of your
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  career, anything involving health care, and then give
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  us an overview of your your current role
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  at Take Command and exactly what you all
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  do.
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  Sure.
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  So I'm I'm Jack Hooper. I'm the CEO
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  and founder of Take Command.
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  So Take Command, we are a software platform
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  that helps employers
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  administer the new individual coverage HRA or ICRA.
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  You might ask, alright. How does one get
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  into being a, ICRA software
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  administrator?
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  For me, my my career actually started not
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  in health care.
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  I,
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  I joke. I I used to work for
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  the federal government.
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  I was in intelligence and worked for the
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  FBI.
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  But now I say, you know, I'm I'm
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  even cooler. I work in health insurance now.
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  So
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  grateful for that background, but but really what
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  moved me into health care was was a
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  personal experience.
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  I have,
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  two twin boys that are turning 13 next
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  month.
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  So
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  that's kinda how I mark my milestones.
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  And as much of a blessing as they've
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  been, they were an enormous surprise for for
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  me and my wife. We had just,
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  left our jobs and families in Texas and
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  moved to Philadelphia for graduate school
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  and live living in a nice efficiency apartment
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  and found out we were pregnant with twins.
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  And, you can imagine the the shock and
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  surprise and,
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  really my personal journey of trying to figure
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  out, okay, how much do twins cost?
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  How much in student loans do I need
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  to take out,
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  to pay for these twins
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  is, what got me into health care. So,
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  Take Command was initially
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  an early player in in kind of the
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  ACA
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  advising,
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  movement of helping people,
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  pick and choose a health plan in the
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  ACA.
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  We stepped into the predecessor to ICRA,
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  the QSC HRA,
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  and started working with small employers,
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  and then actually had a chance to,
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  work with,
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  regulators,
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  during the first Trump administration to help create
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  some of the ICRA rules after after broader
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  health care reform had failed. So,
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  excited to, you know, it's kinda evolution going
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  from individual to small business to now with
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  ICRA
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  working more and more with,
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  large employers.
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  Sure. Quite an evolution of a career you've
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  had then, it sounds like, Jack, from from
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  federal government,
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  intelligence to
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  health insurance. Day it all makes sense. You
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  know, maybe there's a bigger plan out there,
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  but I'm super grateful. Yeah. Sure. Well, so
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  it's clearly it's a personal journey for you
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  as well as much as it is professional
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  in terms of the background of Take Command.
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  And, you know, you mentioned,
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  health insurance. It kinda sounded like or at
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  least what I've heard from leaders in the
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  industry before, when they talk to people who
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  aren't in this industry, that it it almost
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  seems like it would be very dry. But
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  I think you and I both know it
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  is it is anything but that. And,
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  and it's also going through a a lot
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  of change right now. It always has been.
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  But right now, as as you know, given
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  given the company that you help start and
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  oversee, it's it's a it's an incredible time
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  for for how this industry and how health
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  benefits are changing. And
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  that's that's what I wanted to get us
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  started about talking today.
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  An interesting
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  move out of West Virginia.
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  There's a county there that recently became one
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  of the first public entities
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  to drop the traditional group coverage that everybody
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  knows in favor of an ICRA through Take
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  Command.
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  So maybe for our audience who isn't familiar,
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  first, Jack, just give us a quick
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  overview what is ICRA, and then what's kind
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  of the what's kind of the significance here
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  of seeing a public entity,
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  go go in this direction?
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  Yeah. Great question.
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  You know, ICRA is a term
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  you know, it's it's, six years old now,
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  so it became a thing in in January
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  2020.
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  It stands for the individual coverage health reimbursement
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  arrangement or individual coverage HRA.
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  I think a lot of health executives, you
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  know, early on
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  kind of mistakenly
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  threw it into the HRA, FSA, HSA category
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  of, like, oh, okay. Here's another thing or
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  or another twist.
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  But but, fundamentally, although it shares the the
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  three letter acronym with with, HRA,
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  it really is a fundamentally
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  new way for employers to think about,
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  insurance benefits. So it, you know, I know
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  many of your listeners have been around for
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  a while, and this this idea of defined
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  contribution,
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  always seems to have, fits and starts in
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  our industry.
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  Well, ICRA actually now provides the the rules
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  and regulations,
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  for defined contribution to be a real thing
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  in health care. You know, so what that
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  looks like now is employers,
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  small, medium, large,
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  instead of purchasing a traditional group health plan
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  for for their employees,
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  now they can offer a defined contribution. So
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  kind of this four zero one k style.
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  There's a lot of flexibility with, hey. I
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  wanna give maybe $300
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  a month to my part time employees and
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  600 to my full time or different amounts
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  based on location,
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  or other approved employee classes.
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  It creates this really flexible
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  opportunities for for employers. It solves a lot
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  of the problems that,
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  you know, group health plans have dealt with
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  in terms of adverse selection or or not
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  being able to anything more about remote work
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  and being able to cover people coast to
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  coast. But it creates this really cool opportunity
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  for, individual employees now where, okay, they can
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  go,
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  purchase a plan in their local market.
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  Administrators like Take Command and and others have
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  gotten good at helping advise employees on, hey.
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  You should pick this plan because it's got
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  your doctor in it, or this one's gonna
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  cover your prescriptions the best.
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  And it creates this
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  real real kind of flexible,
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  layer of coverage at at two different levels,
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  at the employer,
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  and then at the the employee level.
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  And the the other great thing about it,
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  you know, we're super excited to see,
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  Monongahela
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  County in in West Virginia,
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  you know, really be the first
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  I know some other, like, municipalities have explored
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  ICRA, but this was a a big public
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  win for ICRA.
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  And, you know, they Mongolia faces the the
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  same challenges that a lot of employers do
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  of of, hey. We've got rising,
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  premiums.
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  In this case, we've got a fixed
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  tax base or tip or fixed revenue base,
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  and absorbing,
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  you know, these twenty, thirty, 40%
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  increases,
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  actually gets really hard. And,
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  you know, so ICRA, because it's a fine
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  contribution,
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  it it does provide more cost control to
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  the employers.
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  There actually was a an interesting,
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  their meeting minutes from from their council meeting,
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  came out yesterday, and there's an item in
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  it in in the commissioner report.
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  Let me find it here real quick.
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  Talking about saving $700,000,
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  this last year by shifting to ICRA,
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  and the the cost that their employees were
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  paying, their premiums,
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  dropped between about 7%.
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  So a huge win just by being able
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  to to control the cost
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  and and kinda reset the the insurance game.
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  And it's really interesting. Those those, figures you
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  you stated there, Jack, in terms of some
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  of the savings this county will see. And
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  and I wonder, you know, you said there's
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  other government entities that have been interested in
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  ICRA, but this was really one of the
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  more the the first or the more most
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  public,
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  situation that we've seen. So are you seeing
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  more interest from from government employers?
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  And could we see you know, I think
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  fair to say, this is a pretty small
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  county in a in a smaller state. So
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  where do we are you gonna see at
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  some point entire states or or larger,
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  counties
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  look into something like this?
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  You know, I think so. And and I
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  think,
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  so so, yes, it's still early days in
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  ICRA. As mentioned, it's it's six years old,
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  which and and our,
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  in our industry, it's it's, you know, the
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  first inning,
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  of of a longer game.
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  But but I think, you know, for for
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  health plan executives
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  thinking about how this could evolve. Right? You
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  know, you've got your,
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  kinda early mover, early adopters right now.
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  Now this county,
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  you know, they,
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  working with their team,
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  they were really forward leaning.
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  They were actively looking for solutions,
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  and,
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  ICRO was a great fit, and and now
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  they're gonna recognize those savings.
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  You know? And it's it's stories and case
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  studies like that that kinda move you from
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  the early adopter phase, you know, into the
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  more kinda, you know, medium adopter or, a
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  little bit more mainstream. So I I don't
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  think it's gonna happen overnight,
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  but I do think,
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  you know, steady over time,
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  ICRO is being is gonna become more and
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  more mainstream and and commonplace.
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  And and as a health plan executive,
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  you know, really thinking about, alright, what is
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  our ICRO strategy? How do we,
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  play offense,
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  if we've got opportunities to that? Or how
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  do we play defense?
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  I you know, ICRA, it's it's sub 1%
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  right now, but if you're not thinking about
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  it, I think you're you're gonna be a
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  little bit behind in the next few years
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  Sure. Or getting caught up in the heart.
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  Yeah. No. It makes a lot of sense.
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  And I think just given some of the
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  group
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  rates we've seen this year alone compared to
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  some of those savings you you mentioned, Jack,
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  I think for a lot of entities, a
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  lot of employers, it's gonna be hard to
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  ignore,
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  moving forward. But I also wanted to talk
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  wanted to talk about some of the bigger
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  context
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  here around ICRA and, of course, the ACA,
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  and everything that's been going on at the
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  federal level. Mhmm. With the expiration of the
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  the enhanced subsidies last year,
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  no real congressional solution in sight, even if
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  that is in the form of going down
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  the HSA path, which we've seen.
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  Some Republicans really been pushing recently. So preliminary
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  enrollment data for the ACA, and I know
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  enrollment just ended yesterday, so we don't have
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  the final numbers. But it has declined around
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  the country. Some states, a lot more than
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  others.
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  But it looks like as of the start
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  of this month in January, about three and
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  a half percent decline around the country. So
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  I wonder overall how you're thinking about this
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  as you look through this data,
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  and as as you see, you know, around
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  the country, different state marketplaces.
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  How is this instability affecting employer interest in
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  ECHO right now? Does it change the value
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  proposition for workers?
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  How are you thinking about all this?
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  It's a good good question, Jacob.
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  And, you know, we did see a lot
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  of employers
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  this year were,
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  exploring ICRA.
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  I'd say they got close to the finish
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  line,
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  but, you know, some of the political uncertainty
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  or market uncertainty is like, well, let's wait
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  one more year. Let's let's kinda see how
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  things shake out. So,
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  you know, we we we've all learned in
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  this industry not not to bet on Congress,
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  and, you know,
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  health care reform gets recast as insurance reform,
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  over and over again.
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  I I I do think, you know, what's
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  encouraging, though, is is the long term,
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  and seeing in in a strange way. I
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  I I think, you know, we're all hoping
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  for some reforms or for,
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  the subsidies to be to come back or
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  at least tapered down,
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  over a period. You know, the the sudden
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  shocks to the system are are what kinda
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  hurt or or can be be frustrating.
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  But we are encouraged, though, and now we're
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  hearing Republicans talk about funding CSR payments,
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  which,
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  you know, would be great because that gets
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  money where it's it needs to be for
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  lower income Americans and helps bring the you
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  know, removes the silver loading problem
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  and helps bring premiums down for everyone else.
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  You know, ICRA is interesting because it
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  it doesn't rely on premium credits. Most ICRA
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  recipients,
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  because they're getting an ICRA allowance, they're not
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  eligible for tax credits. So they're that small
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  percentage of the market that's gonna pay full
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  freight for for the premium.
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  And so anything like CSR payments or,
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  other reforms that can bring down that top
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  line number are are desirable,
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  for ICRA.
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  I I was encouraged, though,
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  again, as you mentioned, still early days with
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  getting numbers in, and and there is a
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  decline.
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  A big fear I had was, oh, is
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  this gonna be the,
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  kinda unwinding
• 13:49
  or,
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  you know, really damaging to the ACA marketplace.
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  I have a feeling that 3% will drop
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  a little bit further as as people,
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  maybe they don't effectuate their policies fully in
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  in January. But we're but we're past the,
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  oh my gosh, the ACA is
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  falling twenty, thirty percent, and we're gonna see
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  big pullbacks and and kinda
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  death spiral start,
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  activity like we saw,
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  you know, a couple years ago in in
• 14:15
  the individual market.
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  It does feel like it's stabilized.
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  And,
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  the encouraging thing talking to some insurance carriers,
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  okay. While while individual enrollment may be pulling
• 14:28
  back,
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  is ICRA an alternative,
• 14:31
  for them to replace some of those losses?
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  So that's where I talk about, you know,
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  executives needing that kind of thinking and and
• 14:39
  strategy of, hey. How do we lean in
• 14:40
  here? And if we're if we're a big
• 14:43
  ACA,
• 14:44
  carrier and we're gonna lose some enrollments,
• 14:47
  let's go make it up in the small,
• 14:49
  medium, large business segment with ICRA, to replace
• 14:52
  those individual enrollments.
• 14:55
  Mhmm. And that's an interesting point. I think
• 14:56
  definitely,
• 14:57
  is would is catching the ear of a
• 14:59
  lot of our listeners,
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  hearing hearing from you right now, Jack. I
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  also you know, to your point, three and
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  a half percent seems to be the worst
• 15:08
  number in terms of an enrollment drop, and
• 15:09
  it'll probably come down from there, which really
• 15:12
  goes in the face of a lot of
• 15:13
  some of the projections we were seeing of
• 15:15
  that it was, you know, doomsday for the
• 15:16
  ACA to your point. So I think that's
• 15:19
  also, you know, at least on our end,
• 15:20
  worth some follow-up coverage of
• 15:23
  where did these projections go wrong.
• 15:25
  That's a that's another story.
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  But like like you've mentioned, it it's early
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  days still for ICRA, and it's only been
• 15:32
  around for six years now.
• 15:34
  That all being said, adoption has grown a
• 15:36
  thousand percent since 2020 around the country.
• 15:39
  I I know the data can be difficult
• 15:42
  to to collect. Small denominators
• 15:44
  for that growth, but, yeah, it's, it's it's
• 15:47
  picking up. And and the the highest end
• 15:50
  I've seen in terms of, enrollment is is,
• 15:53
  upwards towards a million people enrolled
• 15:56
  around the country in these types of arrangements.
• 15:58
  And that's on the upper end of projections.
• 16:00
  It it, you know, it I've seen in
• 16:02
  half, in terms of on the lower end.
• 16:04
  But I think overall,
• 16:05
  what do you think it's gonna take at
• 16:08
  this point moving forward to to move this
• 16:10
  from a niche product to to really a
• 16:12
  mainstream option that ensures the traditional insurers are
• 16:16
  are all in on?
• 16:17
  Good question.
• 16:18
  Yeah. I think, you know, the projections and
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  data are are hard to get here. It's
• 16:22
  it's getting better. There's some, entities like the
• 16:25
  HRA Council.
• 16:27
  Kaiser Family Foundation put it on their survey
• 16:29
  this year, so we'll start to get a
• 16:31
  lot more data.
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  I I think it's probably in the 400,000
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  to 600,000,
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  enrolled range. So it's very small in terms
• 16:41
  of the overall market.
• 16:43
  You know, but when you look at the
• 16:44
  ACA, it was at 24,000,000.
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  Now it's gonna be, let's say, it shakes
• 16:49
  out at 20 to 21,000,000.
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  You know, what's gonna grow it to 25,
• 16:54
  thirty, fifty million is is going going to
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  be ICRA.
• 16:59
  And I think what is gonna,
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  you know, move that forward,
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  as the ACA shows more resiliency,
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  as health plans get better,
• 17:09
  you start to see these positive snowball effects.
• 17:12
  And and one of the things I like
• 17:13
  to talk about is who is the ACA
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  designed for, and then who is it working
• 17:17
  with for ICRA?
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  So most of the policies, you know, rightly
• 17:20
  so, are designed for
• 17:22
  subsidized individuals that are are truly independent.
• 17:26
  So it's all about narrow networks and and
• 17:29
  thin formularies
• 17:30
  to try to get that low premium, $0
• 17:33
  premium plan and and show up at the
• 17:35
  top of the state marketplace.
• 17:37
  What's been fascinating with ICRA
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  is it's attracting a new type of buyer
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  to the individual market. These are medium and
• 17:44
  large employers
• 17:46
  employees at at employers.
• 17:49
  They want HSAs.
• 17:51
  They want,
• 17:52
  broader networks. They're less price sensitive. Like I
• 17:54
  said, they're not getting a tax credit or
• 17:56
  subsidy.
• 17:58
  And
• 17:59
  what's been interesting, Jacob, is starting to talk
• 18:01
  to some insurance carriers that are looking at
• 18:03
  this opportunity and saying,
• 18:06
  Hey. I can design an off exchange
• 18:08
  plan.
• 18:09
  Still ACA qualified. Right? But we're not gonna
• 18:12
  sell it through the exchange, which means we
• 18:13
  don't have to pay exchange fees. We don't
• 18:15
  have to do the silver loading thing, and
• 18:17
  we can design it, you know, with with,
• 18:20
  features that,
• 18:21
  these employees are interested in. And and I
• 18:24
  share that because I think it creates a
• 18:26
  positive snowball where, okay, if the ICRA market
• 18:30
  is at, you know, 400 to 600,000
• 18:32
  right now,
• 18:34
  and we see counties like Mongolia
• 18:36
  who are having to move to ICRA because
• 18:38
  of cost.
• 18:40
  Okay. Well, now there's more in the market.
• 18:42
  We see the ACA market stabilize.
• 18:45
  We see plans get introduced for this audience
• 18:48
  that attracts the next level of county, right,
• 18:51
  or the next employer that,
• 18:53
  says, well, hey. You know, we don't have
• 18:55
  to save as much. It's worth it, or
• 18:56
  these options are better or as good as.
• 18:59
  And I think you start to see that
• 19:00
  that positive snowball effect.
• 19:04
  One one ancillary we've studied closely, Jacob, is,
• 19:07
  the transition in corporate America from
• 19:10
  primarily pension plans,
• 19:12
  in the seventies and eighties
• 19:14
  to four zero one k style,
• 19:16
  plans
• 19:18
  in the late eighties and and in the
• 19:19
  into the nineties and and, of course, where
• 19:21
  we are today.
• 19:22
  And it wasn't a sudden
• 19:24
  shift. It wasn't like every year or one
• 19:26
  year, everyone moved, but it was very,
• 19:30
  steady and meticulous. And over a twenty year
• 19:32
  period, right, you
• 19:34
  see pension plans really start to fade,
• 19:37
  and you see four zero one k really
• 19:39
  start to to become,
• 19:41
  you know,
• 19:42
  early adopters and then mainstream, and then it
• 19:44
  becomes the primary vehicle for a lot of
• 19:46
  employers. I I think we'll see similar movement
• 19:49
  with ICRA.
• 19:50
  And that's a really good point, Jack. And
• 19:53
  and I think even if you were talking
• 19:54
  about,
• 19:55
  you just talk about pensions to four zero
• 19:56
  one k's. If we're talking about, you know,
• 19:58
  a comparable of traditional health insurance to ICRA,
• 20:01
  you know, that this is something that's been
• 20:03
  in place since you could say the forties.
• 20:05
  You know, it's gonna take time, to to
• 20:08
  un unroll this kind of system.
• 20:10
  And and something you'd said earlier in terms
• 20:12
  of the traditional insurers
• 20:14
  because we're we're hearing that too that it
• 20:15
  I think for a while we were hearing
• 20:17
  that they were worried it was gonna cannibalize
• 20:19
  some of their product lines. But now to
• 20:21
  your point, it's a lot of them are
• 20:22
  looking at this as as an opportunity,
• 20:25
  to pick up more business or or investing
• 20:27
  in some of these ICRA administration companies directly,
• 20:31
  is what we're what we're certainly seeing.
• 20:34
  Yeah. One one stat we love to throw
• 20:36
  out, and it's true. We've
• 20:38
  validated the HRA council and and with other
• 20:41
  ICRA administrators, but,
• 20:43
  85 to 90%
• 20:45
  of small employers
• 20:47
  under 50,
• 20:49
  are using ICRA to offer coverage for the
• 20:51
  first time.
• 20:52
  So we hear a lot of you know,
• 20:54
  there's concern about cannibalization.
• 20:56
  And, yes, in the in the upper market,
• 20:58
  you know, if you're a group carrier and,
• 21:01
  it gets busted up and it goes to
• 21:03
  ICRA, you you want an individual plan. They
• 21:05
  are ready to catch as many lives and
• 21:07
  members as you can.
• 21:09
  But on the small market, there is an
• 21:11
  enormous opportunity,
• 21:13
  to get new lives, new people covered,
• 21:16
  that have never had coverage before. So that's
• 21:19
  that's something that's been really exciting. Yeah. Definitely.
• 21:21
  Entirely untapped market. It's it's really interesting to
• 21:24
  think about. Well, Jack, you've got the ears
• 21:26
  of a lot of those
• 21:27
  traditional health plan leaders,
• 21:30
  from all over the country right now.
• 21:32
  So what else are we missing? Any final
• 21:34
  thoughts you wanna share with them, final bits
• 21:36
  of advice as we as we look into
• 21:38
  this new year?
• 21:40
  New year, you know, obviously, we're
• 21:43
  not not used to uncertainty,
• 21:45
  in in the space.
• 21:47
  But, I would really encourage,
• 21:49
  executives to to look at ICRA and think
• 21:52
  about the strategy there. And,
• 21:54
  it's picking up steam despite,
• 21:57
  you know,
• 21:58
  uncertainty in the ACA, and and, ultimately, I
• 22:00
  think it's gonna be a huge component and
• 22:03
  and proponent of the of the individual market.
• 22:06
  And we're starting to see more and more
• 22:08
  stories like this county in West Virginia,
• 22:11
  have a huge success,
• 22:13
  in moving
• 22:15
  moving to the to ICR arrangement.
• 22:17
  Now the county is happy and employees are
• 22:19
  happy. So that's that's something that I think
• 22:22
  you know, and it's it's not just cost
• 22:24
  arbitrage or or something like that.
• 22:26
  It's it it really is.
• 22:28
  Hey. There's there's a way that this can
• 22:30
  be a better model.
• 22:32
  So I I would encourage,
• 22:34
  executives to think about this, you know, reach
• 22:36
  out, to us at at Take Command.
• 22:39
  We have a whole,
• 22:40
  strategy primer on on ICRA. We're happy to
• 22:43
  share, and can look at trends in your
• 22:46
  local market.
• 22:47
  There's resources from the HRA council,
• 22:50
  and others as well. And and,
• 22:53
  you know, it's it's very small now, but
• 22:55
  but I think we're gonna see,
• 22:57
  steady and and significant growth. And and and
• 22:59
  I truly,
• 23:01
  to be a little bit provocative,
• 23:03
  I don't know if it's three years, five
• 23:05
  years, ten years, but but we will look
• 23:08
  back
• 23:08
  and say, oh my gosh. What happened to
• 23:10
  group insurance? It's all gone away or it's
• 23:13
  all changed over. And that sounds crazy.
• 23:15
  But, again, if I was talking to a
• 23:17
  pension exec,
• 23:18
  in the mid eighties, they would have said,
• 23:20
  oh, no way.
• 23:21
  But but look where they are now. And
• 23:24
  we're seeing the pull through demand from employers,
• 23:26
  and I think that's what's gonna really start
• 23:28
  getting,
• 23:30
  the attention of,
• 23:31
  health plan executives,
• 23:33
  brokers,
• 23:34
  and consultants.
• 23:35
  You know, employers look at this and say,
• 23:38
  heck, yeah. Why why wouldn't I do this?
• 23:40
  And, that should be either a red flag
• 23:43
  or a giant
• 23:44
  beacon of opportunity if if you're a health
• 23:46
  plan executive.
• 23:48
  It's fun to think about exciting stuff on
• 23:50
  the horizon for the industry. So, Jack, I
• 23:52
  I wanna thank you for taking the time
• 23:53
  to chat with us about what you're seeing
• 23:56
  recently across the country and for sharing your
• 23:58
  insights with our listeners. We really appreciate it.
• 24:00
  Absolutely. Hey. Thank you, Jacob, and and,
• 24:03
  thank you for having us on. Real pleasure
• 24:05
  and real honor. Absolutely. And to our listeners,
• 24:07
  if you'd like to listen to more podcasts
• 24:09
  from Becker's Healthcare, you can visit beckershospitalreview.com.