How Health Insurance Costs Hurt Small Businesses

For most small businesses, health insurance is their second or third largest expense. And they usually find out what it's going to cost them two to three weeks before renewal.

In this clip from our episode “Why Health Insurance Needs Transparency”, host John Driscoll and Ty Wang, Co-Founder and CEO of Angle Health, break down why unpredictable premium increases make it nearly impossible for small businesses to plan, and why the market has accepted this as normal for far too long.

Listen to the full episode here

🎙️⚕️ABOUT TY WANG
Ty Wang is the co-founder and CEO of Angle Health, the first AI-native healthcare benefits platform built to give SMBs access to quality health plans.

Ty grew up in an immigrant family, where access to healthcare and healthcare literacy were significant challenges. He founded Angle Health to address these issues, focusing on providing transparency and simplicity in the healthcare system. Today, Angle Health partners with thousands of brokers and employers across the U.S., primarily serving small- and medium-sized businesses to offer affordable, high-quality healthcare coverage to tens of thousands of Americans.

Prior to founding Angle Health, Ty led major deployments at Palantir Technologies and spent several years in public service with the U.S. government across various foreign and domestic posts. He graduated from Washington University in St. Louis with degrees in electrical engineering and systems engineering.

🎙️⚕️ABOUT CARETALK
CareTalk is a weekly podcast that provides an incisive, no B.S. view of the US healthcare industry. Join co-hosts John Driscoll (President U.S. Healthcare and EVP, Walgreens Boots Alliance) and David Williams (President, Health Business Group) as they debate the latest in US healthcare news, business and policy. 

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Transcript

John: 0:06

Is the right way to think about this, Ty, that because you have an advanced tech connectivity and flexibility that you can deliver a better product at a lower price to the small and medium-sized business markets?

Ty: 0:23

It's, it's really about delivering a better product that's much more tailored to the needs of, of these small businesses and their employees. And in turn, because of that, we're able to help them, uh, really control their costs and, and provide a much more transparency behind their costs as well. Uh, so that ultimately, uh, leads to stable, highly predictable year-over-year rates. And, um, one of the, one of the biggest complaints that we hear in the market all the time from our, from our employers, from brokers in the market, is that, uh, everyone is kind of accustomed to their healthcare costs increasing year over year. That's something that, that's, that's, while unfortunate, is, is, is expected. What makes it extremely difficult for small businesses across the country today is not knowing what those rates are going to be. When you're talking about these small, medium sized businesses, if they're offering healthcare benefits, if they're offering health insurance to their employees, that is one of the highest costs. That is one of their largest expenses, usually number two or three after payroll. Um, and when you don't know as a small business owner, whether it's gonna... that, that cost is going to go up 5% or 50% year over year until two, three weeks leading up to the end of the year or until your renewal, it pretty much makes it impossible to, to actually budget or, or plan out your year.

John: 1:48

Do you give multi-year guarantees or, or trend guarantees that would help small businesses figure that out?

Ty: 1:56

So we, we don't give multi-year guarantees, but what we do provide, which is something that, that the vast majority of these small businesses have never had before, is the transparency behind those costs and, and being able to provide that in real time or near real time, and, and being able to provide that, uh, uh, throughout the year where they-- there, there's no longer a surprise for what their rates are going to be because they have a clear understanding of exactly what their, what their, um, uh, company's healthcare costs are.

John: 2:30

So walk, walk me through an example of that. Let's say a, a, a small business has a number of folks who get pregnant in a year. Mm-hmm. That would have a big, uh, potential impact on trend. How would they-- How would you figure that out, and then how would it translate into helping them manage their cost?'Cause you're on a r- it's-- you're on a super- Yeah important issue. Of-often it is, health insurance is the second largest or third largest budget item, and it's the one with the-- which you have the least amount of control or influence.

Ty: 3:02

Yeah. Yeah. So it, it's, um, it's a few things, uh, that I can touch on there. So one- It's not that we have unique access to this data that any-- that other health insurers don't have, it's that we're willing to provide the transparency behind it. So, so when you look at these large incumbent insurers, uh, they benefit from that opacity. They benefit from not sharing that, that level of information with their, uh, uh, with, with, with these small businesses because that gives them the ability to, to price or underwrite them based on, uh, not necessarily based on the actual costs of, of, of the employer, but based on whatever their business goals are. So, like, if they need to actually make up, uh, they need to retain a larger client and, and now they need to make up that margin through other, other clients, they can do that. And, and because the employer doesn't, doesn't actually have any of the data behind the scenes, um, they, they don't really... And because there's so few choices in the market, in, in, in any kind-- given market, there's usually only maybe two or three, uh, options when it comes to health insurers. Um, they're, they're kinda left holding the bag there, like they don't, they don't have any other options. So, so it's being able to provide the, the transparency there, and then it's also being able to deliver them the services now that help to address the specific costs, the specific drivers for their costs. So, um, a great example is if there is a cancer patient, if an, if an employer has an employee or, or employee's family member with cancer and they need to go through, um, uh, uh, courses of, of infusions or chemotherapy, being able to deliver them the kinds of services actually reduce the o-- that help them manage those, those conditions and decrease the overall cost of that care, like bringing in, uh, we just announced our partnership with Leap Health earlier this year for at-home infusions. Um, moving, moving the site of care outside of a, uh, a setting that is both a very poor experience in a hospital and, and, and, and significantly higher cost to, um, something that's at home where you're getting the exact same treatment, the exact same, same, um, uh, drugs, uh, at a fraction of the, of the cost. And, and that's how, that's how we're really stabilizing and, and, and, and, and, and bending the cost curves for our employers. So it's both the transparency and the ability to bring these kinds of, uh, tools and solutions that historically have not been available for these small businesses all the way down to, to that-- this market.