Freelancers Union Expands Affordable and Stable Coverage for Independent Workers

Feb 24, 2012, 11:32 AM, Posted by

Some good news came our way this week -- a story unfolding the way we hoped it would.

Freelancers Union, a Pioneer Portfolio grantee, will launch three Consumer Operated and Oriented Plans (CO-OPs)--nonprofit, consumer-governed insurance companies envisioned by the Affordable Care Act to expand health insurance choices for consumers and small businesses. This is made possible by $340 million in low-interest and no-interest federal loans announced Feb. 21 by the Centers for Medicare & Medicaid Services to start three of the first seven CO-OPs in New York, New Jersey and Oregon.

We’re delighted because Freelancers Union used a 2010 grant from Pioneer to shape its existing ground-breaking model for demand-side, consumer-driven health care into a proposal for the new world of CO-OPs.

It was a natural fit. Here’s the back story.

The existence of Freelancers Union is recognition that for the 30 percent of the workforce that earns its living as freelancers, contractors and temps – so-called independent or contingent workers – there are no employer-provided benefits, including health insurance. Many of these workers earn too much to qualify for public assistance and not enough to afford the health insurance available in the individual market, typically more costly than the group market plans offered by employers.

As a Foundation, we have been concerned for 30 years about Americans’ lack of access to affordable and stable health coverage, so a partnership took shape over the course of three grants.

We first partnered with Freelancers Union in 2007, when they were looking to start a health plan for the contingent work force, but with an important twist. They wanted the benefits to reflect input from the workers. Our first grant helped the organization conduct surveys and focus groups to shape the benefit design. It learned that its members wanted a product aligned to their holistic needs on top of catastrophic coverage.

With a second grant in 2008, we joined a consortium of funders that helped launch a for-profit subsidiary, Freelancers Insurance Co., with a line of products that combine catastrophic insurance coverage with special attention paid to mental health services as well as wellness, prevention and alternative therapies.

Then with a third grant in 2010 we sought to enable Freelancers Union to expand its group purchasing health-benefits program from New York into New Jersey and Georgia. We envisioned this work might produce a prototype for the CO-OPs, and it did. All CO-OPs won’t follow the Freelancers Union model, of course, but it certainly sets a standard.

The work of Freelancers Union reflects many of the core ideas that drive Pioneer Portfolio grant-making. It is transformative and disruptive. As large insurers back away from the individual market because of the tight profit margins, some fresh thinking is badly needed, like rolling individuals into groups even though they do not work together, and then listening to them carefully to design products that meet their needs.

That’s pioneering, and we’re proud to have played a part.

Follow @FreelancersU on Twitter.

This commentary originally appeared on the RWJF Pioneering Ideas blog.