“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” Berkshire Hathaway Chairman and CEO Warren Buffet said in a news release. With the new plan, the company heads hope to provide low-cost, high-quality service from a company “free from profit-making incentives and constraints.”
Here’s what we know about the new health care plan so far:
Who is eligible?
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According to the press release, the plan is meant for U.S. employees of Amazon, the largest online retailer in the world; Berkshire Hathaway, led by billionaire investor Warrent Buffett; and JPMorgan Chase, the largest bank in the U.S. by assets.
NPR reported that according to recent annual calculations, the three companies employ more than 950,000 people worldwide.
What is the mission of the health care plan?
The goal is to provide health care solutions and improve employee satisfaction while reducing costs. The trio hopes to create solutions benefiting the company’s U.S. employees, their families, and “potentially, all Americans,” according to the news release.
“Hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind, and a long-term orientation,” Amazon CEO Jeff Bezos said.
When will the company officially launch?
The health care company is still in its early planning stages. According to the news release, a long-term management plan and headquarters location are still in the works.
Who is leading the execution of the plan?
Here’s a list of leading executives, according to the release:
- Marvelle Sullivan Berchtold, managing director at JPMorgan Chase
- Todd Combs, investment officer at Berkshire Hathaway
- Beth Galetti, senior vice president at Amazon
How has the White House responded?
“We agree in that philosophy. We think that individual workers should have to pay less for health care,” White House economic adviser Gary Cohn told CNBC.
Referencing an October 2017 executive order, Cohn said President Donald Trump already “created association health-care plans, which is the exact same thing that those companies did.”
According to NPR’s Scott Horsley, the order sought to make it easier for employees to offer their own insurance plans and band with small businesses to pool employees and increase purchasing power.
Has this been done before?
"One of the most prominent examples is what is now Kaiser Permanente, a big provider of health care in this country,” Horsley said in October. “It started with the Kaiser shipyards and providing, first, workers-comp kind of care and, later, more integrated health care for employees. So it is possible."
What are experts saying about the announcement?
“It could be big,” Ed Kaplan, national health practice leader for the Segal Group, told the New York Times. “Those are three big players, and I think if they get into health care insurance or the health care coverage space they are going to make a big impact.”
Kaplan, who often helps large employers negotiate health coverage, said many large insurers run into problems when it comes to issues like people going to the emergency room without actually needing to or people having to schedule a doctor’s visit for routine tasks.
He told the New York Times that these three companies may face the same challenges, but they could hire talented employees to provide that service.
Impact on the health care industry
According to CNN, on the morning of the announcement, shares of top insurer UnitedHealth were down 3 percent in premarket trading and helped drive a more than 300-point drop in the Dow.
Cigna and Anthem also dropped more than 5 percent and Aetna and Humana fell 3 percent each.
Drug store giants CVS and Walgreens both fell more than 4 percent.