50 Fortune 500 companies join forces to give four million uninsured working Americans access to affordable health insurance

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 health care costs and incorporate performance standards that help consumers choose hospitals and physicians.

Alarmed by the 43.6 million Americans without health care protection, the drain on worker productivity, the ballooning costs of company health benefits, and the widespread inefficiencies in the U.S. health care 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, health care 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 health care 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 health care system that is in critical condition today,” said J. Randall MacDonald, senior vice president for IBM, human resources, and chairman of HR Policy’s Health Care Policy Roundtable, at a press conference today. “We’re not a cure-all. The root causes of problems like the uninsured and sharply escalating health care costs are far too complex to be solved overnight, but these two coalitions are a solid step in the right direction.”

Affordable Health Care Solutions Coalition
Specifically, members of the Affordable Health Care Solutions Coalition have agreed to pool their affiliated uninsured workers and dependents to create a single group currently estimated at four million people nationwide. They include:

• 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 18-month coverage; and
• students who are no longer eligible under their parents’ health care 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 chairman of the Affordable Health Care Solutions Coalition.

The Affordable Health Care 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 health care 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.”

Regional Health Care Quality Initiatives
In addition to the nationwide coalition, HR Policy will establish Regional Health Care 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 health care plan for the region to secure better pricing, benefits, and higher quality insurance for participating employers and their insured employees.

“We’re using our leverage to get better pricing and help consumers make well-informed decisions in buying health care services,” said John D. Butler, executive vice president, administration and chief HR officer for Textron Inc. and chairman of the Regional Initiatives. “In exchange for delivering a block of employees and dependents from our major employers in that region to one health care plan, we will get detailed quality and efficiency data on local hospitals and physicians. Plus, the health plan selected will offer small employers in these regions access to more affordable coverage and more flexible underwriting.”

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

A detailed analysis of the problems addressed and overviews of the two coalitions are contained in HR Policy’s 104-page white paper entitled “Leadership Action Plan on the Uninsured: A Strategy for Achieving Lasting Health Care Market Reform.” The Employment Policy Foundation, the Employee Benefit Research Institute, and the ERISA Industry Committee provided significant assistance in the research for the paper as well as the planning and formulation of these initiatives. An executive summary is available on the Web at https://healthcarert.com/

“The problem of the uninsured and access to quality health care has been documented in great detail by a number of highly credible organizations,” said IBM’s MacDonald on the first day of Cover the Uninsured Week. Seventeen percent of all Americans under 65 are uninsured. The 43.6 million uninsureds are expected to grow to 63 million by 2010. Meantime, the average cost of health insurance for employees with coverage has jumped 69 percent over the last five years, “and we see no end in sight for future price hikes,” he added.

HR Policy has teamed with The Leapfrog Group, a Washington, DC-based coalition of more than 150 public and private sector health care purchasing organizations. Leapfrog is dedicated to improving the quality, safety, and affordability of health care and helping consumers and purchasers to make more informed health care decisions.

Dr. Robert Galvin, Leapfrog’s chair, said, “Too few purchasers and consumers of health care services have the information and insights they need to make informed decisions about the medical professionals and health care facilities they choose. For that reason, these employers will use their considerable combined purchasing power to urge health care plans to disclose the efficiency and effectiveness of their physicians and hospitals.”

Galvin said the coalitions are relying on benchmarks and standards established by The Leapfrog Group as well as the National Quality Forum, National Committee on Quality Assurance, Bridges to Excellence, The Centers for Medicare and Medicaid Services, and the Joint Commission on Accreditation of Health Care Organizations.