Improving Access Through Health Plan Portability: a conversation with Alex Acosta

In our inaugural episode of the Health Guardianship Podcast, we had the pleasure of speaking with Alex Acosta, former Secretary of Labor, about the evolving landscape of healthcare and the challenges associated with employer-based insurance systems. We explored the roots of today’s healthcare system, its inefficiencies, and potential solutions that could revolutionize the industry.

Listen to the episode here: Unlocking Healthcare Reform

The Problem with Employer-Based Healthcare

A significant portion of Americans receive healthcare benefits through their employers, a structure that has its origins in World War II. As Secretary Acosta explained, wage controls during the war led employers to offer benefits to attract workers. Over time, this developed into the employer-based insurance system we see today. While effective in providing coverage, it has created unintended consequences, including a lack of flexibility for workers.

Many employees feel “locked in” to their jobs due to healthcare coverage. For instance, if someone with a sick family member receives a better job offer, they may hesitate to switch employers because they fear the disruption of their healthcare benefits. This not only stifles labor market fluidity but also restricts consumer choice, which is a key factor in promoting efficiency and innovation in healthcare.

Market Failures in the System

Secretary Acosta highlighted two major market failures in the current system. First, the complex structure of employer-based insurance introduces multiple layers of intermediaries—employers, insurance companies, and brokers—that often prioritize cost over patient care. This results in a system where individuals are not incentivized to seek high-quality, preventive care, focusing instead on immediate, cost-effective solutions that benefit employers in the short term.

Second, the lack of portability in healthcare further ties individuals to their employers. This system was not designed with patient choice or long-term health in mind, leading to a disconnect between the healthcare consumers need and what they receive. 

A Solution: Increased Consumer Choice

The traditional employer-based model can coexist with other innovative approaches, such as association health plans, health shares, and even community or faith-based healthcare systems. These alternatives offer individuals more control over their healthcare, allowing them to choose options that align with their long-term health goals.

One compelling example is the use of association health plans, which Acosta helped introduce during his time as Secretary of Labor. These plans allow groups of small employers or associations, like the Chamber of Commerce, to band together to offer insurance to their members. Not only does this create economies of scale, lowering insurance costs, but it also enables portability, so individuals can carry their healthcare coverage across employers within the association.

By giving individuals the freedom to choose between traditional employer-based plans, association plans, or other innovative models, we can create a healthcare system that is more responsive to the needs of patients. For example, a small business owner or freelancer could benefit from a portable, affordable health share program, while a traditional employee might stick with their employer-provided plan.

Beyond “Sick Care”: Focusing on TRUE Preventive Health

A key theme of the conversation was the need to shift from a “sick care” system—focused on treating illnesses as they arise—to a true healthcare system that prioritizes prevention. Secretary Acosta shared the story of a friend with diabetes who, despite having access to medications and treatments, struggled to receive support for preventive measures like diet and exercise programs.

Dr. Daneshghari emphasized that employers, while well-meaning, often focus on getting employees back to work quickly, without considering long-term health. This short-term approach fails to address the root causes of chronic conditions, resulting in higher healthcare costs and poorer health outcomes over time.

By giving patients more choices and focusing on preventive care, we can create a system that better supports long-term health and wellness.

The Path Forward

As the healthcare landscape continues to evolve, it’s clear that innovation is needed to address the shortcomings of the current system. Association health plans, community health models, and increased consumer choice are all potential solutions that could empower individuals to take control of their healthcare.

These association health plans could then bake in models of holistic care like Health Guardianship in order to increase on-demand access to care, while empowering portability of an individuals coverage, regardless of where they work.  

By putting patients at the center of the healthcare system and offering them real choices, we can move beyond the inefficiencies of the current system and create a healthcare model that works for everyone.