May 2004

Big companies form coalition to provide insurance to uninsured

More than 50 Fortune 500 companies have joined forces to give an estimated four million uninsured working Americans access to affordable health insurance coverage. The united effort is part of a broad market reform to reduce spiraling healthcare costs and incorporate performance standards that help consumers choose hospitals and physicians.

Alarmed by the 43.6 million Americans without healthcare protection, the drain on worker productivity, the ballooning costs of company health benefits, and the widespread inefficiencies in the U.S. healthcare system, these major employers have formed two large coalitions to marshal their buying power to address these problems.

Led by the HR Policy Association, comprised of the senior HR executives of more than 200 of America's largest companies, the two coalitions will create new alliances among major employers, healthcare plans, and providers — hospitals and physicians. These three-way partnerships will help fill the insurance gap for many working Americans and their dependents who are currently ineligible for employer-sponsored coverage or cannot afford individually underwritten health insurance.

Coalition members will also combine their purchasing power on a region-by- region basis to generate premium discounts and administrative cost savings for employers, employees and small businesses in the area. The initiative will also give participants hard-to-obtain healthcare quality and performance data so they can make more informed buying decisions.

"As the nation's biggest employers, we're major stakeholders — and a potential force for positive change in an American healthcare system that is in critical condition today," said J. Randall MacDonald, senior vice president, human resources, IBM Corporation, and chairman of HR Policy's Healthcare Policy Roundtable.

Specifically, members of the Affordable Healthcare Solutions Coalition have agreed to pool their affiliated uninsured workers and dependents to create a single group currently estimated at four million people nationwide, including part-time employees, contract and temporary workers; independent agents; consultants and vendors; pre-65 retirees who do not have group options; employees currently in a waiting period; COBRA participants who have exhausted their coverage; and students who are no longer eligible under their parents’ healthcare plan.

The coalition will then seek bids from health plans, ultimately selecting one that will offer health insurance coverage at a lower cost than what is currently available in the individual insurance market and with fewer barriers to entry.

"We are aiming to work with one health plan to create a series of coverage choices at different prices that can be tailored to fit a wide range of budgets, from low-income part-time workers to highly compensated full-time independent contractors not covered by a company plan," explained Greg A. Lee, senior vice president, human resources, for Sears, Roebuck & Company and chairperson of the Affordable Healthcare Solutions Coalition.

The Affordable Healthcare Solutions is being designed and structured by global human resources outsourcing and consulting firm Hewitt Associates, under the direction of HR Policy Association. To make the coverage more attractive, Tom Beauregard, lead healthcare strategy consultant for Hewitt, said, "The group is seeking guaranteed issue of some coverage benefits regardless of pre-existing conditions and will work with the consulting firm and the health plan to streamline underwriting to cut costs."

In addition to the nationwide coalition, HR Policy will establish Regional Healthcare Quality Initiatives, which are purchasing coalitions in areas where the Association's member companies employ a substantial percentage of the workforce — between 5 and 15 percent. These coalitions will mobilize their buying power and choose a single healthcare plan for the region to secure better pricing, benefits, and higher quality insurance for participating employers and their insured employees.

The targeted regions include Detroit, Dallas-Fort Worth, Chicago, Atlanta, New York and Los Angeles.

Source: HR Policy, www.hrpolicy.org

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