← Becker’s Healthcare Podcast
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- [00:02]
A
This is where health insurance leadership comes together. Becker's 4th Annual Spring Payer Issues Roundtable brings together over 400 payer and health plan executives and more than 100 speakers to Chicago, April 13th and 14th. This year's event includes keynote conversations with the industry's top leaders and former President George W. Bush. For the full agenda and event details, visit Beckershospitalreview.com and click on the Events tab in the upper right. We're looking forward to hosting you here in Chicago. Hello everyone. This is Jacob Emerson with the Becker's Payer Issues podcast. Thrilled today to be joined by Jack Hooper, who is the CEO and co founder of Take Command. Jack, thanks so much for taking the time to be with me on the podcast today.
- [00:47]
B
Jacob, thank you so much for for having me on. Excited to talk with you today.
- [00:54]
A
Likewise, Jack, and appreciate you taking the time to chat with us. Before we get started, can you first tell the audience a little bit about yourself, your, your background in terms of your career, anything involving healthcare, and then give us an overview of your current role at Take Command and exactly what you all do?
- [01:10]
B
Sure. So I'm Jack Hooper. I'm the CEO and founder of Take Command. So Take Command. We are a software platform that helps employers administer the new individual coverage HRA or ichra. You might ask. All right, how does one get into being a ICHRA software administrator? For me, my career actually started not in health care. I joke. I used to work for the federal government. I was in intelligence and worked for the FBI. But now I say, you know, I'm even cooler. I work in health insurance now. So grateful for that background. But really what moved me into health care was a personal experience. I have two twin boys that are turning 13 next month. So that's kind of how I mark my milestones. And as much of a blessing as they've been, they were an enormous surprise for me and my wife. We had just left our jobs and families in Texas and moved to Philadelphia for graduate school and live living in a nice efficiency apartment and found out we were pregnant with twins. And you can imagine the shock and surprise and really my personal journey of trying to figure out, okay, how much do twins cost? How much in student loans do I need to take out to pay for these twins is what got me into healthcare. So Take Command was initially an early player in kind of the ACA advising movement of helping people pick and choose a health plan in the aca. We stepped into the predecessor to ichra, the QSC hra, and started working with small employers and then actually had a chance to work with regulators during the first Trump administration to help create some of the ICHRA rules after broader healthcare reform had failed. So excited to. You know, that's kind of evolution going from individual to small business to now Ichra working more and more with large employers. Sure.
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A
Quite an evolution of a career you've had then. It sounds like Jack from, from federal government intelligence to help.
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B
Maybe there's a bigger plan out there, but I'm super grateful.
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A
Yeah, sure. Well, so it's clearly it's a personal journey for you as well, as much as it is professional in terms of the background of Take Command. And you know, you mentioned health insurance. It kind of sounded like, or at least what I've heard from leaders in the industry before when they talk to people who aren't in this industry, that it, it almost seems like it would be very dry. But I think you and I both know it is, it is anything but that. And, and it's also going through a lot of change right now. It always has been. But right now, as, as you know, given, given the company that you helped start and oversee, it's, it's a, it's an incredible time for, for how this industry and how health benefits are changing. And that's, that's what I wanted to get us started about. Talking today, an interesting move out of West Virginia county there that recently became one of the first public entities to drop the traditional group coverage that everybody knows in favor of an ICRA through Take Command. So maybe for our audience who isn't familiar, first, Jack, just give us a quick overview. What is icra? And then what's kind of the, what's kind of the significance here of seeing a public entity go, go in this direction?
- [04:44]
B
Yeah, great question. You know, ICRA is a term, you know, it's six years old now, so it became a thing in January 2020. It stands for the individual Coverage Health Reimbursement arrangement or individual coverage hra. I think a lot of health executives early on kind of mistakenly threw it into the HRA FSA HSA category of like, okay, here's another thing or another twist. But fundamentally, although it shares the three letter acronym with hra, it really is a fundamentally new way for employers to think about insurance benefits. So I know many of your listeners have been around for a while and this idea of defined contribution always seems to have fits and starts in our industry. Well, ICHRA actually now provides the rules and regulations for defined contribution to be a real thing in healthcare. You know, so what that looks like now is employers small, medium, large, instead of purchasing a traditional group health plan for their employees, now they can offer a defined contribution. So kind of this 401k style, there's a lot of flexibility with hey, I want to give maybe $300 a month to my part time employees and 600 to my full time or different amounts based on location or other approved employee classes. And it creates this really flexible opportunities for employers. It solves a lot of the problems that you know, group health plans have dealt with in terms of adverse selection or not being able to think more about remote work and being able to cover people coast to coast. But it creates this really cool opportunity for individual employees now where okay, they can go purchase a plan in their local market. Administrators like Take Command and others have gotten good at helping advise employees on hey, you should pick this plan because it's got your doctor in it or this one's going to cover your prescriptions the best. And it creates this real, real kind of flexible layer of coverage at two different levels at the employer and then at the employee level. And the other great thing about it, you know, we're super excited to see Monongahlia county in West Virgin, you know, really be the first. I know some other like municipalities have explored Ichra, but this was a big public win for Ichra and you know they Mongolia faces the, the same challenges that a lot of employers do of hey, we've got rising premiums in this case we've got a fixed tax base or tip or fixed revenue base and absorbing you know these 20, 30, 40% increases actually gets really hard. And you know, so Ichra, because it's a fine contribution, it does provide more cost control to the employers. There actually was an interesting, their meeting minutes from, from their council meeting came out yesterday and there's an item in it in the commissioner report. Let me find it here real quick. Talking about saving $700,000 this last year by shifting to Ichra and the the cost that their employees were paying their premiums dropped between about 7%. So a huge win just by being able to, to control the costs and kind of reset the, the insurance game.
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A
It's really interesting those, those figures you, you stated there Jack, in terms of some of the savings this county will see. And I wonder, you know, you said there's other government entities that have been interested in Accra, but this was really one of the more, the first or the more most public situation that we've seen. So are you seeing more interest from, from government employers and could we see, you know, I think fair to say this is a pretty small county in a, in a smaller state. So do we. Are you going to see at some point entire states or larger counties look into something like this?
- [09:03]
B
You know, I think so. And I think so, yes. It's still early days in ichra, as mentioned. It's, it's six years old, which in our, in our industry it's, it's, you know, the first inning of a longer game. But I think, you know, for health plan executives thinking about how this could evolve, right. You know, you've got your kind of early mover, early adopters right now. Now this county, you know, they working with their team, they were really forward leaning, they were actively looking for solutions and ICHRA was a great fit and now they're going to recognize those savings. You know, it's stories and case studies like that that kind of move you from the early adopter phase, you know, into the more kind of medium adopter or a little bit more mainstream. So I don't think it's going to happen overnight, but I do think, you know, steady over time. ICHRA is going to become more and more mainstream and commonplace. And as a health plan executive, you know, really thinking about, all right, what is our ICHRA strategy, how do we play offense if we've got opportunities for that or how do we play defense? You know, Ichra, it's sub 1% right now. But if you're not thinking about it, I think you're going to be a little bit behind in the next few years. Sure.
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A
Yeah. No, it makes a lot of sense. And I think just given some of the group rates we've seen this year alone compared to some of those savings you, you mentioned, Jack. I think for a lot of entities, a lot of employers, it's going to be hard to ignore moving forward. But I also want to talk, wanted to talk about some of the bigger context here around ICHRA and of course the ACA and everything that's been going on at the federal level with the expiration of the, the enhanced subsidies last year, no real congressional solution in, even if that is in the form of going down the HSA path, which we've seen some Republicans really been pushing recently. So preliminary enrollment data for the aca and I know enrollment just ended yesterday, so we don't have the final numbers, but it has declined around the country, some states a lot more than others, but it looks like as of the start of this month In January, about 3 1/2% decline around the country. So I wonder overall how you're thinking about this as you look through this data and as you see, you know, around the country, different state marketplaces. How is this instability affecting employer interest in Echo right now? Does it change the value proposition for workers? How are you thinking about all this?
- [11:46]
B
It's a good, good question, Jacob. And you know, we did see a lot of employers this year were exploring ichra. I'd say they got close to the finish line. But you know, some of the political uncertainty or market uncertainty, it was like, well, let's wait one more year. Let's, let's kind of see how things shake out. So, you know, we've all learned in this industry not, not to bet on Congress and you know, health care reform gets recast as insurance reform over and over again. I do think, you know, what's encouraging though is, is the long term and seeing in a strange way, I think, you know, we're all hoping for some reforms or for the subsidies to be, to come back or at least taper down over a period. You know, the sudden shocks to the system are what kind of hurt or can be, be frustrating. But we are encouraged though now we're hearing Republicans talk about funding CSR payments, which you know, would be great because that gets money where it needs to be for lower income Americans and helps bring the, you know, removes the silver loading problem. It helps bring premiums down for everyone else. You know, ICHRA is interesting because doesn't rely on premium credits. Most ICHRA recipients, because they're getting an ICHRA allowance, they're not eligible for tax credits. So they're that small percentage of the market that's going to pay full freight for the premium. And so anything like CSR payments or other reforms that can bring down that top line number are desirable for ichra. I was encouraged though again, as you mentioned, still early days with getting numbers in and there is a decline. A big fear I had was, oh, is this going to be the kind of unwinding or, you know, really damaging to the ACA marketplace. I have a feeling that 3% will drop a little bit further as people maybe they don't effectuate their policies fully in January, but we're past the, oh my gosh, the ACAs falling 20, 30% and we're going to see big pullbacks and kind of death spiral start activity like we saw a couple years ago in the individual market. It does feel like it's stabilized. And the encouraging thing, talking to some insurance carriers, okay, while while individual enrollment may be pulling back is ichra an alternative for them to replace some of those losses. So that's where I talk about, you know, executives needing that kind of thinking and strategy of hey, how do we lean in here? And if we're a big ACA carrier and we're going to lose some enrollments, let's go make it up in the small, medium large business segment with ICHRA to replace those individual enrollments.
- [14:55]
A
That's an interesting point I think definitely is catching the ear of a lot of our listeners hearing from you right now, Jack. I also, you know, to your point, three and a half percent seems to be the worst number in terms of an enrollment drop and it'll probably come down from there, which really goes in the face of a lot of some of the projections we were seeing that it was, you know, doomsday for the ACA to your point. So I think that's also so, you know, at least on our end it's worth some follow up coverage of where did these projections go wrong? That's a, that's another story. But like, like you've mentioned, it's early days still for ICRA and it's only been around for six years now. That all being said, adoption has grown a thousand percent since 2020 around the country. I know the data can be difficult.
- [15:42]
B
To, to collect small denominators for that growth. But yeah, it's, it's, it's picking up.
- [15:49]
A
And, and the highest end I've seen in terms of enrollment is, is upwards towards a million people enrolled around the country in these types of arrangements. And that's on the upper end of projections. It, you know, I've seen in half in terms of, on the lower end. But I think overall what do you think it's going to take at this point moving forward to, to move this from a niche product to, to really a mainstream option that ensures the traditional insurers are, are all in on.
- [16:18]
B
Good question. Yeah, I think, you know, the projections and data are hard to get here. It's getting better. There's some entities like the HRA Council, Kaiser Family foundation put it on their survey this year. So we'll start to get a lot more data. I think it's probably in the 400,000 to 600,000 enrolled range. So it's very small in terms of the overall market, you know, but when you look at the ACA, it was at 24 million. Now it's going to be, let's say it shakes out at 20 to 21 million. You know, what's going to grow? It to 25, 30, 50 million is going to be Ichra. And I think what is going to, you know, move that forward as the ACA shows more resiliency, as health plans get better, you start to see these positive snowball effects. One of the things I like to talk about is who is the ACA designed for and then who is it working with for ichra? So most of the policies, rightly so, are designed for subsidized individuals that are truly independent. So it's all about narrow networks and thin formularies to try to get that low premium, $0 premium plan and show up at the top of the state marketplace. What's been fascinating with ICHRA is it's attracting a new type of buyer to the individual market. These are medium and large employers, employees at employers, they want HSAs, they want broader networks, they're less price sensitive. Like I said, they're not getting a tax credit or subsidy. And what's been interesting, Jacob, is starting to talk to some insurance carriers that are looking at this opportunity and saying, huh, hey, I can design an off exchange plan, still ACA qualified, right? But we're not going to sell it through the exchange, which means we have to pay exchange fees, we have to do the silver loading thing and we can design it, you know, with, with features that these employees are interested in. And I share that because I think it creates a positive snowball where, okay, if the ICHRA market is at, you know, 400 to 600,000 right now, and we see counties like Mongolia who are having to move to ICHRA because of costs, okay, well now there's more in the market. We see the ACA market stabilize, we see plans get introduced for this audience that attracts the next level of county, right, or the next employer that says, well, hey, you know, we don't have to save as much, it's worth it, or these options are better or as good ads. And I think you start to see that positive snowball effect. One ancillary we've studied closely, Jacob, is the transition in corporate America from primarily pension plans in the 70s and 80s to 401k style plans in the late 80s and into the 90s and of course where we are today. And it wasn't a sudden shift, it wasn't like every year or one year everyone moved. But it was very steady and meticulous. And over a 20 year period, right, you see pension plans really start to fade and you see 401k really start to become early adopters and then mainstream and then it becomes the primary vehicle for A lot of employers, I think we'll see similar movement with ichra.
- [19:51]
A
And that's a really good point, Jack. And I think even if you were talking about, you just talk about pensions to 401ks, if we're talking about, you know, a comparable of traditional health insurance to ichra, you know, that this is something that's been in place since you could say the 40s, you know, it's going to take time to, to unroll this kind of system. And, and something you said earlier in terms of the traditional insurers, because we're, we're hearing that too, that it, I think for a while we were hearing that they were worried it was going to cannibalize some of their product lines. But now to your point, it's. A lot of them are looking at this as, as an opportunity to pick up more business or, or investing in some of these ICHRAD administration companies directly is what we're, what we're certainly seeing.
- [20:34]
B
One, one stat we love to throw out, and it's true, we've validated at the HRA Council and with other Ichra administrators. But 85 to 90% of small employers under 50 are using Ichra to offer coverage for the first time. So we hear a lot of, you know, there's concern about cannibalization and yes, in the, in the upper market, you know, if you're a group carrier and it gets busted up and it goes to icra, you, you want an individual plan, they are ready to catch as many lives and members as you can. But on the small market, there is an enormous opportunity to get new lives, new people covered that have never had coverage before. So that's, that's something that's been really exciting.
- [21:21]
A
Yeah, definitely an entirely untapped market. It's, it's really interesting to think about. Well, Jack, you've got the ears of a lot of those traditional health plan leaders from all over the country right now. So what else are we missing? Any final thoughts you want to share with them, final bits of advice as we, as we look into this new year?
- [21:41]
B
New Year? You know, obviously we're not, not used to uncertainty in, in the space, but I would really encourage executives to look at ICHRA and think about the strategy there. And it's picking up steam despite, you know, uncertainty in the aca and ultimately I think is going to be a huge component and proponent of the, of the individual market. And we're starting to see more and more stories like this county in West Virginia have a huge success in moving, moving to the ICHRA arrangement. Now the county's happy and employees are happy. So that's, that's something that I think, you know, and it's not just cost arbitrage or something like that. It's, it, it really is. Hey, there's, there's a way that this can be a better model. So I, I would encourage executives to think about this. You know, reach out to us at Take Command. We have a whole strategy primer on, on ichra. We're happy to share and contribute and look at trends in your local market. There's resources from the HRA council and others as well. And you know, it's very small now, but I think we're going to see steady and significant growth. And I truly, to be a little bit provocative, I don't know if it's three years, five years, 10 years, but we will look back and say, oh my gosh, what happened to group insurance? It's all gone away or it's all changed over. And that sounds crazy, but again, if I was talking to a pension Exec in the mid-80s, they would have said, oh, no way. But, but look where they are now. And we're seeing the pull through demand from employers. And I think that's what's going to really start getting the attention of health plan executives, brokers and consultants. You know, employers look at this and say, heck yeah, why, why wouldn't I do this? And that should be either a red flag or a giant beacon of opportunity. If you're a health plan executive, it's.
- [23:49]
A
Fun to think about exciting stuff on the horizon for the industry. So, Jack, I want to thank you for taking the time to chat with us about what you're seeing recently across the country and for sharing your insights with our listeners. We really appreciate it.
- [24:01]
B
Absolutely. Hey, thank you, Jacob. And thank you for having us on. Real pleasure and real honor. Absolutely.
- [24:07]
A
And to our listeners, if you'd like to listen to more podcasts from Becker's Healthcare, you can visit Beckershospitalreview.com.