This insurance company got rid of deductibles and copays

Every year, the cost of health insurance premiums goes up, and yet Americans still carry hundreds of billions of dollars in nationwide medical debt. Where have health plans gone wrong?

This is a question Ben Simmons, vice president of insurance at healthcare benefits company Gravie, and his team considered when revamping the traditional health plan model. Gravie offers the Comfort Plan, a copay and deductible-free option, which differs from most traditional plans, where consumers pay these fees on top of monthly premiums for coverage and protection, says Simmons.

“To add insult to injury, people are not only paying these really high premium prices that keep going up, but they’re also paying out-of-pocket before their health plan gives them any sort of value,” Simmons says. “They’re paying to meet a large deductible, and then they’re still paying a copay afterward. When we designed Comfort, we tried to flip that on its head.”

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For a premium that Gravie claims is comparable to traditional health plans, members have access to services like preventative care, specialists visits, urgent care, labs and imaging, generic prescriptions, ongoing therapy visits and virtual care at no additional cost to the consumer. For Simmons, it’s vital that members feel they get value from their plan right away, rather than waiting or avoiding care due to cost barriers, such as meeting a deductible that could be thousands of dollars.

“We built this health plan because we heard from our customers and the market that people are just so dissatisfied with the health insurance status quo,” says Simmons. “Premiums are increasing faster than people’s wages are increasing and faster than employers’ budgets are increasing — it’s unsustainable.”

Employers already estimate that premiums will increase by around 5% in 2022, while a survey by Willis Towers Watson found that on average employees will receive just a 3% raise in their salary. As workers shell out more money to cover insurance and healthcare costs, the pressure is on employers to find better solutions, Simmons says.

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Still, in order for the Gravie plan to sustain itself, less common but expensive services like surgery or hospitalization will cost members more than it would on a traditional health plan. The Comfort plan does have three out-of-pocket maximums, in which members can choose what price point would be appropriate for their budget. Like a traditional health plan, Gravie does cover 100% of that member’s healthcare costs once that maximum is met, including surgeries and specialty brand drugs. Simmons also notes that Gravie offers a ‘healthcare layaway’ program called Gravie Pay, allowing members to swipe a virtual card and pay their bill in monthly installments.

Overall, Gravie claims to save its members $1,200 a year in healthcare costs. Simmons also believes these savings trickle through the entire system: from insurance carriers to employers. Since Comfort plan users can access services like preventative care and generic prescriptions for free, they may have more incentive to manage any minor health issues or even chronic conditions, he explains.

“When you remove the barrier to entry, people find it a lot easier to get the care they need before their conditions blow up and turn into expensive, catastrophic claims down the road,” says Simmons. “There’s also a change in behavior, where people will choose to go to the urgent care rather than the emergency room, which ends up costing everyone a lot less.”

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For example, with Gravie’s plan, an emergency visit costs $250 — the average ER visit is $2,000, according to MedHelp. Free access to urgent care could mean that fewer people would go to the ER and there will be fewer delays for those with more immediate health problems. Moreover, this redirection could even mean the difference between life and death, as more emergency rooms find themselves far past their capacity. According to the COVID-19 Hospital Capacity Circuit Breaker Dashboard, 600 U.S. counties already have zero hospital beds available.

At its roots, the Comfort plan is meant to treat its members as the primary customer, which means the product’s success is dependent on the user experience, explains Simmons. And as more employers reflect on their benefits offerings, it may prove crucial to centralize the employee experience as well.

“We started from the right principles and aren’t shackled by the traditional ways that other carriers have operated,” says Simmons. “Now, we’ve had this national global health crisis, so it’s more important than ever for employers to have strong benefits where employees can feel safe and taken care of.”