John Butler: Health Insurance Sucks: The Moral Case for Better Business Healthcare

Transcript

[0:00:28] DA: In his new book, Health Insurance Sucks, John Butler uncovers the sinister world of business healthcare and delivers new and powerful solutions that you could implement today. The book aims to provide you with an entirely new way of approaching healthcare for employees and to arm you with every weapon you need to fight against big insurance, big pharma and the big government players that have controlled us all for decades. You could be on offense rather than continuing to play defense against skyrocketing premiums and deteriorating benefits. In fact, the book takes all the rules levied by insurance companies and pharmacy companies and even our own federal and state governments and uses those same exact rules to beat them at their own game. Hey, listeners. My name is Drew Applebaum and I’m excited to be here today with John Butler, author of Health Insurance Sucks: The Moral Case for Better Business Healthcare. John, thank you for joining. Welcome to The Author Hour Podcast.

[0:01:23] John Butler: It’s a pleasure, Drew.

[0:01:24] DA: Let’s kick this off, can you give us a quick rundown of your professional background?

[0:01:28] John Butler: Yeah, I, out of college, just worked some odd jobs but ended up in 1988, getting into the finance and insurance field, progressed there as a financial advisor until 1996 when I had an opportunity to buy a block of business in the employee benefit space. That includes health, dental, life, disability, 401(k)s and so forth and I am a securities broker as well. Then fast forward to about seven years ago, I started to look at specifically the healthcare for businesses and it took me down a journey that was – well, up until this date right here. It’s been seven plus years that took me down a road that I actually didn’t really think I would find all these things but some were maddening, some were wonderful but this is the big elephant in the room for most businesses, the budgets for healthcare or health insurance for companies, comprised about 60 to 80% of the spend and I thought, this is really something to focus on.

[0:02:30] DA: Why was now the time to share the stories in the book and the knowledge in the book? Did you have some sort of “aha moment” Was there enough people saying, “John, you need to spread the word about this.”

[0:02:42] John Butler: Yeah, that’s a good question, there was actually two things that happened of “aha moments for me.” I read a book years ago and it basically described all the real issues, the sinister things behind the scenes of what I call the Wizard of Oz curtain behind healthcare prices. Healthcare prices are really not being addressed at all around the country but their tools, systems and actually even consultants like myself around the country that have dramatically lowered healthcare cost, ergo, if you lower the healthcare cost, you’ll lower the health insurance cost. That was the first “aha moment” and then, there was a bill passed in June of 2019 that went into effect on January 1st of 2020 that literally changed the framework and the foundation of how businesses can offer healthcare. It was those two moments that really opened my eyes to the time of, this is now, this should be out there in America to businesses large and small all over the country because basically, they’re the ones controlling the heartstrings on how these employees get their healthcare.

[0:03:47] DA: Now, clearly you are an expert in the space but a lot of authors will just by doing research or by digging deeper to some of the topics that they’re writing on, will come to some major breakthroughs and learnings. Did you have any of these major breakthroughs or learnings along your writing journey?

[0:04:03] John Butler: Yeah, there really was and it was kind of a second “aha moment” really, after that piece of legislation was passed. In a general sense, when you work for a company, the employer offers you health insurance or healthcare and the employer owns that contract and everybody mostly understands this, you get a new job, you sign under their program, they start taking money out of your payroll check and they give you maybe a few choices in there but it’s not yours to own. The real big event of course comes if a person leaves the company, they realize they just rented the insurance because there’s this thing called Cobra, most people understand Cobra. You have the ability to extend your employer’s health insurance for 18 months past when you leave but the big thing is really the ownership of that healthcare contract by the employers and I have a description, just one little simple sentence in my book that says, if you worked for a company that your boss said to you that, “We have a car insurance plan at our companies that’s really great and we’d like to have you sign up for that.” You sign up for it and then you realize, maybe mid-year, you find out three people in the company had DUIs and cracked up their cars and your car insurance cost because it’s owned by the company is going up 30 or 40%. Now, you’d really – you’d probably go back to your boss and, “What were you thinking? Here, my driving record is fine.” That’s exactly the way employer healthcare has been run for decades, Drew.

[0:05:28] DA: When you were writing the book, in your mind, who were you writing this book for? Is this for small business owners, is this for people who choose the benefits in large businesses, who could really have the most takeaways from the book?

[0:05:41] John Butler: Well, it’s really, it’s different solutions for different sized companies and then part of it is literally the courage that employers have to step up and make a change. In my mind, there’s three different ways of doing healthcare that aren’t even offered by most brokerage firms. The first one is, you could outsource your benefits to what’s called a PEO or a Professional Employer Organization, that’s kind of a – Simply, if you were a PEO, Drew, you’d setup a whole bunch of programs, health down to life, disability, 401(k) and I just hitched my wagon to your benefits. Basically, that’s how I outsource benefits but brokers don’t tell people about that benefit because they’d lose your business, it’s as simple as that. The healthcare that’s offered within that PEO, we can kind of leave that aside for a second but that’s one program the brokers would never mention to you. The second one is what I call a cafeteria design, it’s cafeteria design because most people understand restaurants and let’s just say your boss gave you so much each month to buy your own lunch, then you get your own stuff, you own it yourself, you customize it, you put that on your tray and then thankful that he’s given you this money. In this regard, and part of this buildup was passed in June of 2019, it’s tax-free money that employers can give their employees just to customize their own plans. Most brokers, the one I want to mention this to their clients because frankly, it’s 10 times the amount of work and it’s about half the commissions. Who wants to do that, right? In my mind, that’s kind of really kind of a big step away because employers not owning the contract on allowing the individuals to own it like they own a lot of other insurance was a big breakthrough. Then, the final one is mostly geared towards larger companies that really don’t want to switch to their HR systems and everything else and that’s what I call custom plan designs and these are programs that literally go after the cost drivers within a health plan and there’s only four of them. Primary care, pharmacy, outpatient and surgery cost and hospitalizations. There are some just tremendous warriors around the country, I’ve met hundreds of them that have systems to control those costs within a healthcare plan. The great thing about these systems is they point people to higher quality healthcare providers at lower cost, believe it or not. It’s just kind of antithetical thinking but the prime example I can use is that big company healthcare designs are offered to companies as low as 200 employees now and the biggest one I know of is and a gentleman that I talk with on a regular basis, Tom Emerick, he used to run Walmart’s program, which was a six-billion-dollar program. Every year, six billion dollars, imagine that. When Tom came in to consult with that company decades ago, he realized that the big money is being spent on the really large ticket items as far as heart surgeries, cancers, transplants and muscular-skeletal operations. What he did was he set up all around the United States what he called smart care centers. Walmart used these smart care centers to allow those employees with those big ticket and difficult claims and health situations to be flown to these smart care centers, have their procedures done and flown back at zero deductible to the employees. Tom lowered Walmart’s spend, 1.8 billion dollars in 18 months and kept it down ever since by using these smart care centers. We’ve got one of them right here in Minnesota, The Mayo Clinic. That’s his transplant center. The incentives he built within Walmart’s plan. Walmart signed off on Tom Emerick’s program and he offers that in the marketplace now, the companies of about 750 employees or more. Nobody knows about these things but you can adopt this into our custom health plan, again, have your employees, if somebody’s down in Florida or Arkansas and they need a liver transplant, they’re flown to the Mayo Clinic, have the procedure done, flown back at zero deductible on their employer health plans. All these – I mean, I could go on for days about this, it’s more of a – just alerting people up to the fact that these things exist in the marketplace right now and I’m hoping that my book kind of highlights that.

[0:10:14] DA: Is it just your expertise and the knowledge that you found and the policies that you found, is that what really differentiates this book from other books in the topic?

[0:10:25] John Butler: Yeah, I think that in general, there’s a lot talked about as far as the healthcare marketplace is concerned, how to lower prescription drug cost, how to access drugs from Canada or worldwide. Why can’t America do that, you know? There’s a lot of things related to that. I think where this is different is, it’s a different framework of thinking that is really common sense because healthcare, believe it or not, got to be employer owned, way back in 1942 when there was wage and price controls for good reason during the war efforts against the Japanese and the Nazis. In order to offer, since employers couldn’t offer an increase in wages to people, they started offering healthcare. Eventually, the government said, “Look, we’re going to pass a temporary law that allows you to give your employees healthcare tax-free just temporary law” but that temporary law still exist today. What it basically did was take your little hundred-person company and cobble all the health of all those hundred employees together into your little company and if the claims go up then your insurance prices go up. Year after year for decades, the prices have gone up, the deductibles have gone higher, in other words, the benefits have gone down and now, we’re left with an average employer spend around the country of $15,000 per employee for a year. What that really relates to in my book and I know it’s mentioned in the first chapter and most employees don’t even know this because they only get so much taken out of their paycheck for health insurance. A single employee averages somewhere between 600 to $900 a month. Now, that’s about two or probably three car payments and you know, if you’re on a family plan, it might 1,200 to 2,000 a month, which is more than most people’s mortgage and the maddening thing for me about the whole thing is you drive around in your car all the time, right? You certainly go home and spend time in your home every day but like about 25 to 30% of the population doesn’t even go in during the year for their – whether this cost going out. If your employer is spending six or $700 a month on your health insurance and you never ran, that’s just about 10 grand lost. Gone and you never used it at all and there doesn’t seem to be an end to it until I really start researching what’s going on. It’s a grassroots movement, it truly is and since the employers have control of the per strengths and more than half of America is under these plans, they can do something about it.

[0:13:12] DA: How can folks really understand these innovative healthcare solutions that already exists around the country and find out which ones really have track records of success?

[0:13:23] John Butler: Yeah, that’s really a great question. That was the hard part for me because normally when a company goes out for an RFP or request for proposal and even the largest companies, I recently had this story happen of the 10,000 person company right here in Minnesota. Two years ago, you know their healthcare cost for going up 6 to 8% a year on a 100 million dollar budget and so when they go out to a request for proposal, how do they know who to pick? I mean, which companies to pick? I would challenge anybody out there to go through any Google site or anything like that and try to find the results from a broker or somebody out there that has a proven track record of their results for the last five or 10 years reducing cost down to 20 to 40%. It is just not even advertised Drew. For my offering in my particular consulting practice, I consider myself a super connector. I do know the companies, the consultants that do have a good track record and I will put them on a company’s RFP. Instead of you wondering who are doing the good jobs out there and who has got a good track record of success, I will be able to immediately do something like that. Now, you know, we’re kind of in a place in time right now where I consider technology to be the biggest jump forward in almost any industry and now with technology being what it is right now, you know you can do broadcast like this. You can do webcast, you can do mastermind classes. There is a lot of knowledge that can be gained online Drew and I just don’t think that that’s here yet but that’s my plan is to bring all of that to the public eye.

[0:15:04] DA: Now, when you’re bringing in a new healthcare solution, is it disruptive to employees? What does that transition look like and you know, how much time on average does it take and is it worth it in the end? What is the percentage savings that one can expect when they make a big change?

[0:15:24] John Butler: Yeah and this is where I talk about the courageous is part of this. You might have some employers that are making so much money per employee per year that that $15,000 is meaningless. It really depends on where the employer is in their situation. You know, 85% of all employers around the United States are small to midsize employers but I am going to address the big companies first at 15%. If those 15% of those large companies, you know they don’t want disruption. They want basically three things. They want to know if it is legal, whatever alternatives are out there, how disruptive is it going to be with my HR team, my finance team, my employees and is there a track record of success. Those are the three things that they want, so those big companies just switch to custom plan design doesn’t disrupt anything, not their HR functions, not their onboarding, off boarding, it is just really almost like a behind the scenes change in the custom design world. If you change the program to a cafeteria design, that is disruptive. There is an administrative change, okay? To the whole process, how you onboard, how you off board people, how you convert to it and so forth but when you look at the cafeteria design change, that can be as much as 40 to 60% in savings to get you out of the cycle of claims being bad and trying to manage that whole thing because you are just giving tax-free money to your employees and allowing them to get what they are on product is on the marketplace. I’ll give you the most dramatic example, I can you and it is my own example and my wife’s example. You know, back in 2018 in August we had our own employer insurance coming due. We were both 60 years old at the time, it was $1,800 a month for our $4,000 deductible plan and I literally just like, “This is crazy. It’s just two of us” you know, that’s a lot of money each year for again, 4,000 deductible is a long way to go until you hit that, so we hardly ever hit it. On August 21st, we switched to a choice plan and the marketplace said not many people are aware of right now but it’s been around for 20 years and it’s called the health sharing option. You may have heard of these Drew, the most prominent is called meta-share but basically, it works just like health insurance we found out. It’s just not called health insurance, it is called the health sharing plan. We actually got onto this plan on August 21st of 2018. Our premium for the both of us for a $500 deductible was $344 a month. That was dramatic, that’s almost $1,500 a month and we’ve been on that program ever since right to today, you know, August 11th, 2021, so it saved us close to $45,000 over that time. Now, a big scare in this kind of space is does it work, okay? That was kind of scary for us too. Here is another story that I brought upon in the book in a later chapter. It was that same year in 2018 on Christmas Eve night, my wife has a pain in her left arm and I rushed her to the hospital at 11:00 Christmas Eve night. You spent four hours in the hospital, it turned out she just had an infection and she was released at about three in the morning. It was exhausting but we came back home and they never asked for our insurance information, believe it or not Drew. I don’t know why but they didn’t. Being in the industry and being on this new health sharing plan, I actually didn’t know what to expect. About six weeks later, I get a bill in the mail for $6,750. Now, it was not unexpected. Four hours in a hospital, a lot of different tests, she turns out she just had an infection. I told the administrator of the hospital local here, I said, “You don’t understand, we don’t have insurance. We’re cash payers under a health share program” and she goes, right away she goes, “Oh, let me get through my other system here.” Ten minutes later, she had reworked our billing and I ask her, “How much was the revised billing going to be?” “$3,125” so in ten minutes our bill was reduced down 53% and we paid 500 of that and our health sharing company paid the rest Drew. That’s quite dramatic and there’s these health sharing companies is not the only solution in the marketplace. This is when a person switches to a cafeteria design at their company, they can happen just by individual health insurance and there is no questions asked. In health sharing, they have some broad health questions, about 70% of the people get through those health questions and qualify. It is something that is flourishing in the marketplace more than anybody knows. There is 15 different companies, two of them are in the employer market and one of them has gone from 15 employees to 350 employees in the last two years. This is real and I think in a general sense threatens the health insurance companies around the United States.

[0:20:28] DA: I do want to bring this up because you actually start the book with this and it’s a note from the author and you actually dive into the mindset necessary to really take the most out of the book. Can you talk about that note a little bit and maybe what it entails?

[0:20:43] John Butler: Yeah, I kind of thinking word pictures. You know, I started to think of framework of thought like a framework of like an apartment building and there is one apartment building maybe as a traditional healthcare or health insurance model, where you just pay all your money to the health insurance company, you don’t see any money back and you know that is one framework. Then there’s the custom plan designs that I talk about that are real. That are more available to the larger companies but that is still kind of is in a framework on that particular apartment building where it’s still the claims that you have within your company matters whether or not your rates go up the very next year and the last framework is I would just suggest that the cafeteria plan design, it just cuts off the head of the snake. It literally disconnects your company from the contract and you’re just giving money to your employees every single month to let them get what they want. That last apartment building and that framework has a different foundation on. That has a really solid foundation. That particular foundation will never change because you’re not even involved in yourself in claims. I mean I had just before I came on here today, a company of about 130 employees and you can’t even imagine the details that they went into as far as trying to decide what their Remicade cost were and their prescription drugs, how is this affecting their clients, how many claims that they have within the group. I mean, the usual process within that framework goes up through about four-month process in your renewal at the end of each year. If you use the cafeteria design, allow people to buy insurance or health share or maybe both, your whole system takes about 30 minutes. You just decide next year how much you’re going to pay for your employees, whether it’s more or not, you have the complete control over your budget and that’s where I think employers today don’t understand. They just think their budget is out of control in that space and they don’t have any choice in the matter.

[0:22:46] DA: Well, John, we just touched on the surface of the book here but I just want to say that writing a book where you’re just educating folks on options and really changing the game for business health insurance is no small feat. I know it’s a long time coming, it took you a long time to write this book, put your thoughts down, so congratulations on having the book published.

[0:23:04] John Butler: Thank you so much. I mean, it was a labor of love it turned out at the end of the day even though I was frustrated at the beginning of the process but getting this all out onto a paper really was cathartic for me.

[0:23:17] DA: Well, this has been a pleasure and I’m excited for people to check out the book. Everyone, the book is called, Health Insurance Sucks, and you could find it on Amazon. John, besides checking out the book, where else can people connect with you?

[0:23:28] John Butler: Yeah, my website is jb-benefits.com. You could find us there, you can find my book on that site as well and you know, we’re going to offer some promotional things on the book coming up here and so I’m excited about that but I can also consult with companies around the nation and get them basically connected to the right people at the right sizes and the right industry to the right places, so I’m excited about doing that as well.

[0:23:54] DA: Well, John, thank you for giving us some of your time today and wish you nothing but the best of luck with your new book.

[0:23:59] John Butler: Thanks Drew.

[0:24:02] DA: Thanks for joining us for this episode of Author Hour. You can get John Butler’s new book, Health Insurance Sucks, on Amazon. Also, you can also find a transcript of this episode and all of our other episodes on our website at authorhour.co. For more Author Hour, subscribe to this podcast on your favorite subscription service. Thank you for joining us, we’ll see you next time. Same place, different author.