A new health insurance pool for the East Valley Chamber of Commerce Alliance is trying to bring down coverage costs for small businesses there. The alliance says the new pool lets small businesses band together to get more buying power.
The vendor for the new pool is Medova Healthcare. It’s offering what are called " level-funded plans," which they describe as a hybrid between traditional and self-funded plans.
Medova’s Joseph Herren said this pool gives small companies what larger, self-insured companies get, like better data about actual health care costs.
"If you have a 10-man group, and everybody's 25 years of age, and they all are pretty healthy, we'll take that, we'll underwrite, and we say, 'we think that this group’s gonna spend this much in claims for the year,'" he said.
And so what a small company ultimately pays in insurance would be closer to what it claims are. Herren said the plans will be Affordable Care Act-compliant and cover the law’s 10 essential health benefits.
But Swapna Reddy at Arizona State University said new products like this could affect the law’s insurance marketplaces.
"We might be siphoning out those healthier individuals in the marketplace out of the ACA marketplaces into these kind of alternative products," she said. "And then what we have left in the ACA marketplaces are a sicker group of people."
That could lead to higher costs for marketplace customers.
Businesses as small as two employees are eligible for the East Valley Chamber of Commerce Alliance pool.
