Three CEOs at Dinner: Health Care Partnership

It’s been a few months since the CEOs of Amazon, Berkshire Hathaway and JPMorgan Chase announced their health care partnership. Let’s assume that we’ve invited them to dinner. Here’s some of what we might learn…over dessert.

  • Who are these CEOs? Amazon’s Mr. Bezos is in his 50s and lives in Washington with his family. Berkshire Hathaway’s Mr. Buffett is more than 80 years old and lives in Nebraska. JPMorgan Chase’s Mr. Dimon is in his early 60s and lives in New York with his family.
  • How are they covered today? Like half of all Americans, these CEOs may be covered through their companies’ health benefits programs (“employer” coverage); however, Mr. Buffett’s age qualifies him for Medicare. He is probably covered by Original Medicare.
  • How might their lives change? Like any American, the CEOs might have family changes, get a new job, earn more or less money, turn 65 years old, or retire. As a result, their health care coverage might change. Let’s look at a few examples.
  • What if Mr. Bezos became a warehouse worker making less than $30,000 per year? He and his family might qualify for Medicaid, especially in Washington where the State expanded the program for lower-income workers.
  • What if Mr. Buffett lived on a fixed income like other seniors? During Medicare’s annual enrollment, Mr. Buffett could evaluate the options in Nebraska on the Medicare.gov website. He might choose a Medicare Advantage plan to reduce his monthly premium and control his out-of-pocket expenses.
  • What if Mr. Dimon retired? If he has an employment agreement, it probably provides coverage until he turns 65 and becomes Medicare eligible. If he doesn’t have such an agreement—like most Americans—Mr. Dimon would be eligible for Obamacare on New York’s exchange. No, he would not qualify for subsidies.
  • How much does their coverage cost*? Expenditures vary by health insurance program. Employer: $6,400/individual and $18,200/family; Medicaid: $8,000/recipient; Medicare: $12,000/beneficiary; and Obamacare: $4,800/individual and $12,200/family. On average, Americans spent $10,348 per capita in 2016.
  • What does this mean for the health care partnership? We’ve illustrated the complexity of the health insurance system and the opportunity to simplify it. While the CEOs are focused on employer coverage and its challenges, they are also thinking big.
  • How big? Mr. Buffett has spoken about Switzerland’s system as an alternative, and Mr. Dimon has spoken about Medicaid as basic coverage for all Americans. Any such change would take years, but if the country had started this effort ten years ago, it might be in place today.
  • What else? Women make most of the health decisions for their families. While these CEOs are committed to the health care partnership, it’s a good guess that they’ve not selected their own health plan. And, yes, a woman would be a good choice in running the partnership.

Every health care program has rules. The rules for employer, Medicaid, Medicare and Obamacare coverage are complicated. We built the “CEO Table Calculator” and filmed the “CEO Table Video” to illustrate the complexity. The calculator and video do not consider these rules, nor do they make any attempt to replicate them.

Please check out the “Frequently Asked Questions” for more information. Preferably over dessert!

*Sources: 1) “National Health Care Spending in 2016” in Health Affairs (January 2018) by Micah Hartman, Anne B. Martin, Nathan Espinosa, Aaron Catlin, and the National Health Expenditure Accounts Team; 2) “Employer Health Benefits 2017 Summary of Findings” by The Kaiser Family Foundation and Health Research & Educational Trust; 3) Kaiser Family Foundation (KFF.org)