Where will gig economy workers get coverage?

57 mln ‘freelance’

NEW YORK, May 15, (RTRS): There are plenty of problems lurking on America’s career ladder, but here is a big one: our healthcare systems are designed for the workforce of 1950.

If you have a lifetime corporate 9-to-5 gig, then you probably have group health insurance.

But what if that is not the kind of job you have? Well, good luck with that.

More Americans than ever are falling into that second category, a scrappy mix of the self-employed, solo entrepreneurs, freelancers and contract workers. More than 57 million Americans, or 36 percent of the workforce, freelance, according to a recent study by the Freelancers Union.

Among millennials, that number rises to 47 percent. By 2027, if trends continue, the majority of the workforce is expected to be freelance. Such a scenario will require new initiatives. Stride Health, a kind of coverage matchmaker, has teamed up with companies whose employees are primarily independent — like Care.com, Etsy, Fiverr, DoorDash and Postmates — to funnel freelancers into the healthcare policies and plans that are right for them.

So far the coordinated push has been encouraging: With Postmates, about 30 percent of workers had Stride’s help navigating Obamacare exchanges, and 1,300 of them who did not have it previously secured coverage.

At Care.com, 85 percent of caregivers working with Stride received a subsidy for health coverage, at an average of $460.54 monthly.

“Like most gig workers, caregivers frequently work for more than one employer with no access to the benefits that those working for traditional employers take for granted,” said Bryan O’Malley, general manager at Care.com. “With more of a social safety net, we are helping provide critical benefits so caregivers can look after themselves and their own families.”

At the best of times, healthcare is a tricky thing to figure out. For independent workers, doubly so: Not only does their income fluctuate month-bymonth, but the policies and premiums available to them are constantly in motion as well.

“If you are a freelancer facing the pure retail cost of healthcare, then it is horrifying,” says Kathy Hempstead, senior advisor for the Princeton, N.J.-based Robert Wood Johnson Foundation, the nation’s largest philanthropic organization devoted solely to healthcare.

Trump

Guarantee

That is why the Affordable Care Act was a “total game-changer” for independent workers, Hempstead said. A system of subsidies helped pull millions into coverage, and plans compliant with the ACA offer a guarantee of a certain level of quality, such as coverage for pre-existing conditions.

Despite the current administration’s attempt to scrap it, the ACA still stands — for now.

Many states are also coming up with solutions on their own.

Minnesota and Alaska, for example, have received waivers to devise plans in which they contribute additional cash to help keep costs low for policyholders.

In those states, premiums have actually been falling, says Karen Pollitz, a senior fellow at the Kaiser Family Foundation. Alaska, for instance, actually had a 26.5 percent decrease in rates on its independent market for 2018.

California, New Jersey and Florida have also taken steps to protect their risk pools and make sure premiums do not soar, says Hempstead. Others, like Iowa, are on the other end of the spectrum, having real trouble providing affordable insurance to independent workers.

There are plenty of other changes bubbling on the healthcare front. One potential development: So-called “association” plans, in the works from the Trump administration.

Meanwhile, the Trump administration is considering expanding Medicare’s ability to negotiate the cost of drugs by giving private payers a role in setting the price of medicines administered in hospitals and doctors’ offices, Health and Human Services Secretary Alex Azar said on Monday.

Details

Azar’s comments provided more details on the plan to lower prescription drug costs for Americans announced on Friday by President Donald Trump.

While Trump assailed “middlemen,” an apparent reference to health insurers and pharmacy benefit managers (PBMs), for pocketing negotiated rebates on drugs rather than passing savings to consumers, the proposal discussed on Monday appears to see them as part of the solution to high prices.

Shares of leading PBMs and insurers rose on Monday. CVS Health Corp shares climbed 3.7 percent with Express Scripts Holding up 1.2 percent, while Humana Inc shares rose 1.7 percent and Cigna Corp closed up 2.2 percent.

“On the one hand we are talking about banning rebates, but on the other we are talking about how great the private market is at controlling costs,” said Craig Garthwaite, director of the healthcare program at Northwestern University’s Kellogg School of Management. “Where exactly do we think those price reductions come from?”

Trump has vowed to tackle rising drug prices since running for office, but his plan spared the pharmaceutical industry from direct government negotiations to control costs, a proposal he endorsed during the 2016 presidential campaign. Shares of drugmakers rose for a second day on Monday as Wall Street analysts said the new policies were unlikely to hurt industry profits.

Medicare is the national health insurance plan run by the federal government for Americans over the age of 65 and the disabled.

Azar, a former pharmaceutical company executive, said Trump views tougher negotiation as key to the plan. Azar said his agency will consider an alternative system for buying Medicare Part B drugs, which are administered by a healthcare provider and covered directly by the government, such as many cancer treatments and infused biotech drugs.