Transcript:
ANNOUNCER: NPR.
[MUSIC PLAYING]
ADRIAN MA: This is The Indicator from Planet Money. I’m Adrian Ma. And here today joining us is NPR Financial Correspondent Maria Aspan. Hey, Maria.
MARIA ASPAN: Hey, there.
MA: You’re here because you have spent a lot of time covering the broken business of US health care.
ASPAN: Yes, it is such a cheerful topic.
MA: Uh-huh. Well, as we know, the US has the most expensive health care in the developed world. And the prices we pay for health insurance are getting even worse.
ASPAN: I’m actually here today, though, to talk about a little bit of good news. And it starts with drinking fancy cocktails.
MA: OK. Are you saying that we basically need to distract ourselves from how expensive health care is getting?
ASPAN: I mean, look, dealing with my insurance company can definitely make me want to drink. And I grew up with this health care system. People who moved to the United States from other countries like Canada can go through some serious sticker shock.
RYAN CLOSE: It’s like, whoa, like this is a wake up call. And this isn’t cheap.
MA: This is Ryan Close. He’s Canadian, but he runs a Chicago startup called Bartesian. And this is where I assume the fancy drinks come in. Bartesian sells a machine that makes you cocktails at home with the push of a button.
ASPAN: But I actually talked to him because his company also has some unusually great benefits for its employees. They don’t pay anything upfront for health insurance. And Adrian, the really good news is he’s not the only employer doing this.
MA: Today on the show, how much can our employers do to make our health insurance more affordable?
ASPAN: Ryan Close and his family moved to Chicago from Ontario in 2019 to get Bartesian off the ground. It was right before the pandemic, which turned out to be great timing for a startup that sells a machine to make cocktails at home.
MA: Yeah. The Bartesian machine kind of looks like one of those Keurig or Nespresso makers, but instead of espresso, it’ll make you an espresso martini, or instead of lattes, you get mocktails and blackberry mango refreshers.
ASPAN: Bartesian sells little pods, also like a Keurig. They’re full of juices and other mixers. Then you can add your own booze to the machine, or not, press a button, and it sounds like this.
[CLICKING SOUND]
[MACHINE WHIRRING]
MA: If you’ve ever felt like drinking was just too much work, I guess this is the product for you.
ASPAN: [LAUGHS] Just inject that alcohol straight into your veins.
MA: Well, maybe that’s their next model. Bartesian has had a blockbuster few years already. It’s lined up some big investors like Suntory Liquor Company, which owns Jim Beam, and Tom Ricketts, whose family owns the Chicago Cubs.
ASPAN: So as Ryan started spending that billionaire money, he decided to put a higher-than-usual amount towards keeping his employees healthy.
CLOSE: Really stemmed likely from being Canadian, right, I would say, and where I just probably took for granted that, oh, of course I don’t pay for health care.
MA: I guess you could take the Canadian out of Ontario, but–
ASPAN: (SINGING) Oh, Canada.
MA: Like most employers, Bartesian negotiates with its health insurance company. But then it’s offered to pay all the upfront costs or premiums instead of taking them out of their employees’ paychecks. We’re talking medical, dental, vision insurance, plus it’s for the workers and their families. The company also gives employees $1,000 every year in a flexible spending account to help with out-of-pocket medical costs.
ASPAN: Look, as somebody who both covers this and pays for my own employer-based health insurance every year, this seems pretty great. That said, Bartesian only has about 30 employees, and not all of them choose to use its health insurance. But it is still a pretty big annual expense for a small business, and it keeps going up.
CLOSE: There has been years where we’re redoing the premiums and renegotiating. And there’s like a slight gulp in my throat, where I’m just like, oh, wow, I remember when it was only this much. That number is getting definitely bigger.
MA: And the numbers got a lot bigger last year across the board. As Indicator listeners know, premiums are skyrocketing for most people who get their health insurance through the Affordable Care Act exchanges, also called Obamacare. That’s because Congress failed to extend subsidies for those plans.
ASPAN: But that’s only part of the problem, because there are actually many more people in the United States who get health insurance through their employers. That’s the system for the majority of working-age Americans. And those premiums are also surging.
MA: Altogether, they’ve gone up about 26% over the past five years. That’s according to the health policy nonprofit, KFF. So for an employer covering a family of four, that means the costs average out to about $27,000 a year.
ASPAN: Adrian, you could buy a car for that amount. You could buy one every year.
MA: That’s a lot of money for a small business.
ASPAN: Or anyone.
MA: So, I mean, most employers generally make employees pay some of this through paycheck deductions, which means a worker’s chipping in almost $7,000 a year on average.
ASPAN: But the thing is, employers don’t have to pass along any of those costs.
MA: In fact, KFF says that last year, about 12% of all employers offered some kind of no-premium medical plan for individual employees. That’s down a little bit from 2024, but it’s still more than I was expecting.
ASPAN: I actually talked to several employers offering these kinds of no-premium health insurance plans, including big companies like Boston Consulting Group, or BCG.
ALICIA PITTMAN: Healthy employees make for a productive workforce, and also a place where our teams want to come to work every day.
MA: That’s Alicia Pittman. She oversees all things HR for BCG. And her company covers all insurance premiums for US employees and most of their family members, which is close to 20,000 people. So we’re talking spending a lot of money here.
ASPAN: And it’s spending money not only on premiums. BCG actually also pays for insurance plans that keep other employee costs low, like the co-pays at the doctor’s office. Alicia even told me that that’s won her some points at home.
PITTMAN: My husband will say, you know, he gets a high five when he leaves the doctor’s office because they look at what his co-pay is, and they’re like, well done! You know, you married well.
MA: Yeah. Bragging rights aside, there’s also a serious return on investment for her company. Alicia says offering these benefits convinces employees to stick around longer and keeps turnover low.
ASPAN: It also makes it easier and cheaper to recruit new people. This is how Ryan Close from Bartesian put it.
CLOSE: That word spreads, and a lot of the hires, you know, we’ve gotten are through our current employees and team members that are like, hey, I know someone who’s interested in coming here.
MA: Now there are a couple of caveats. No-premium health insurance isn’t the same as totally free health insurance. Employees usually also have to pay for deductibles and co-pays at the doctor’s office and to fill prescriptions at the pharmacy.
ASPAN: Some companies that cover all of the upfront costs basically shift expenses around, so you might not have anything taken out of your paycheck, but then you might have to pay a higher deductible or higher co-pays if you actually need to go to the doctor or the hospital.
MA: And if your employer is covering more of your health insurance costs, there might be trade-offs in the rest of how you’re being compensated. That might mean you’re getting paid less in salary or not being offered other kinds of benefits.
ASPAN: For example, Bartesian doesn’t currently have a formal parental leave policy, which is a huge deal for a subset of employees and disproportionately affects women.
MA: So startups gonna startup, I guess?
ASPAN: I guess. I mean, that’s pretty much what Ryan told me. He has about 30 employees, so he’s still running a pretty small business. And he says that he prefers dealing with parental leave requests on an ad-hoc basis.
MA: But Ryan did say, once he starts offering a formal benefit to employees, he wants to stick with it, even if it ends up costing him more over time, like what he’s seen with the no-premium health insurance plans for his workers.
CLOSE: If you start with it and you make it– and you just say, this is a fixed constant in our company, you adapt other things around it. It’s not that difficult.
ASPAN: It’s not a one size fits all solution. But at a time when the costs of health insurance are surging so much for everyone, it was kind of nice to talk to some employers who are thinking about possible fixes.
MA: If not for the larger health care system, at least for the things they can control.
ASPAN: Adrian, I think I have to say it, I will drink to that.
MA: Clink! This episode was produced by Cooper Katz McKim and engineered by Kwesi Lee. It was fact-checked by Sierra Juarez. Kate Concannon is our editor. And The Indicator is a production of NPR.
