First-Dollar Coverage and the Connection with Health Equity
Nonstop Wellness is a Nonprofit Connect Business Premium Member. They were founded with the mission to reduce health insurance costs for nonprofits and their employees without slashing benefits. Learn more about their services here.
What is health equity and why does it matter?
As defined by the CDC, health equity is when each person has the chance to reach “his or her full health potential,” without facing obstacles from “social position or other socially determined circumstances.”
It has taken centuries to create the societal structures that exist in America that enable healthy lives for some and unhealthy lives for others. It will take time and resources to unravel and rebuild, but as HR leaders you are uniquely poised to drive social movement broadly and within your organizations towards removing barriers to healthy living for your staff. It is a daunting task but the time to start is now.
Between 2001 and 2019, healthcare costs increased by 70.8%, while wage growth has remained stagnant. For many families with employer-sponsored health insurance, out-of-pocket costs mean healthcare is unaffordable and inaccessible. We are clearly in need of an urgent call to action for HR leaders to face a pervasive and ongoing healthcare crisis — that of equity in employer-sponsored health insurance.
Now is the time for employers to reconsider their approach to healthcare plan design to ensure it is both affordable and equitable to all employees. The ultimate objective is to achieve and sustain a healthy workforce, and one immediate way to accomplish this objective is to ensure employer health plans offer more affordable access to care than traditional plans.
Assessing first-dollar coverage is a good first step in helping employers optimize costs to promote employee well-being and peace of mind for their employees.
What is first-dollar coverage, and how can it help?
In its simplest terms, first-dollar coverage means the plan pays first, typically eliminating upfront copays and deductibles. This allows employees and their families to access care without fear of being unable to pay upfront costs.
In practice, those seeking care also needn’t worry about meeting a deductible before the plan kicks in. Variations of first dollar coverage can include the plan paying for doctor’s visits, hospitalizations, prescriptions, and a variety of other in-network medical expenses first.
For employers who value diversity, equity, and inclusion as workplace priorities, introducing a first-dollar coverage plan design can help remove barriers to health and wellbeing as well.
Ensuring health equity through first-dollar coverage
Marginalized populations and the economically disadvantaged continue to struggle with the upfront costs of healthcare. Many avoid care altogether as a result. The lowest wage earners — who are often the most vulnerable — spend 35% of their pre-tax income on healthcare, far exceeding the national average of 10%.
Employers don’t have to settle for a healthcare plan design that fails to meet modern standards of equity. A first-dollar coverage approach to healthcare plan design allows all employees and their families to access care without fear of medical debt.
Nobody should have to choose between their physical health and financial stability. Employers must rally their stakeholders to increase visibility around the importance of health accessibility and then reconsider their health benefit management processes through an equity lens. What’s the Solution?
Challenge your health benefits broker to help your organization identify and begin to mitigate health disparities that exist within your plan design. Begin exploring nontraditional funding models that provide first-dollar coverage access to healthcare services. Whether your organization uses self-funded, fully funded, or partial self-funded models for your employer-based health insurance, you can begin to modify these insurance approaches by exploring first-dollar coverage solutions.
Key Takeaways
- Equity in healthcare is a longstanding crisis that only became worse during the COVID-19 pandemic.
- For employers, introducing a first-dollar coverage plan design supports workplace diversity, equity, and inclusion by making healthcare more accessible to your most vulnerable employees.
- Employers of all varieties can modify their existing insurance plans to incorporate first-dollar coverage at affordable rates.
Sources:
https://fas.org/sgp/crs/misc/R45090.pdf
https://www.advisory.com/daily-briefing/2019/05/02/health-care-costs
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