A community-owned approach to medical insurance, to eliminate for-profit middlemen and vastly reduce premiums
Users (individuals, or employers on behalf of their employees) will contribute to the insurance pool by paying premiums just as they had previously.
Every individual would be able to keep track of how much they have contributed and how much coverage they are eligible to receive as a result of that.
If a user has a medical claim, they would submit the claim, it would be processed for validity and eligibility, and it would be paid off accordingly. Initially, this processing would be done manually by our claims processors. Eventually, it would be algorithmized and automated to reduce vastly reduce costs and to have a transparent and unbiased method of processing claims.
Something interesting to explore is a model around accumulated contribution being correlated to coverage amounts (if I have contributed a total of $30,000, I am eligible for a coverage of a larger sum of claims as opposed if I had only contributed $10,000 so far). Of course, this would retain the “minimum coverage” model that exists today (if I began insurance only 3 months back and got hurt, I’d still be eligible for coverage up to a certain amount).
The most obvious and immediate would be (given a successful business) lower premiums. Just by eliminating the need for profits to be extracted to shareholders, up to 10% decrease can be seen in premium prices (profits against revenue). Further innovation in AI for processing of claims and underwriting to replace human-heavy operations would push down costs even more and that can be carried over to users.
Also, since those who contribute to the pool are the shareholders, at any point, a user can choose to “downsize”, or sell some of the coverage/insurance they have to someone else. For example, if I have already previous contributed $100,000 and feel I don’t need that much insurance, I can sell off a portion of my ownership to a buyer in return for an equivalent sum of cash.
Health insurance might be a hard market to break into initially given any extra regulations, larger claims amounts, and negotiating power needed to be accepted.
It might be smart to begin with a parallel market - pet insurance.
The pet market is rapidly growing in the US, especially for millennials (about 70% of all households have at least one pet, a number that’s rapidly growing). Pet insurance, as a result, has also been rapidly growing as a market - currently at about $2.6B paid in annual premiums, and costing a household about $500 every year, with dog owners being 4 times as likely to purchase insurance than cat owners.
This might or might not be the best move, given that it is indeed a “deviation”, but it might be useful to test the principle as a pilot, and perhaps to buy time before working through regulations and moving into health insurance (for humans).
For both health and pet insurance, a B2B approach would also be interesting, since many companies already provide insurance as a benefit. Providing companies a ~20% bulk discount to allow them to enroll their employees at a cheaper premium would be largely beneficial.
A portion of the pool would have to be set aside for administrative costs and growth.
The team would end up comprising of: