Centene CEO: ICHRA is the future of individual health insurance

Individually covered health care reimbursement (ICHRA) arrangements are growing, although at a relatively slow pace. They allow employers to provide their employees with tax-free money so they can purchase their own individual health insurance plan.

During a Monday session at the HLTH conference in Las Vegas, Sarah London, CEO of Centene, shared her thoughts on ICHRA, calling it “the future of individual health insurance.”

“For me, the underlying thesis [of ICHRA] was driven by the belief, whether it’s health insurance or health care consumption in general, that individuals are going to demand more and more action in their health care journey,” she said. “They’re going to want quick and convenient access.”

She added that ICHRA allows employees to choose the plan that works best for them. This compares to traditional group insurance, where a company with thousands of employees has only a few health insurance options.

In 2026, Centene actually plans to offer ICHRA to all of its employees in Indiana, and London itself will join the individual market to test that option, she noted.

“Think about me. I’m a 45-year-old woman, relatively healthy. Until Saturday, I hadn’t been to the doctor this year, and so I can tell you that the amount I’m paying for health insurance is way too high for the actual cost of the care I need,” she said, noting that with ICHRA, she could instead purchase an insurance product on the individual market that would be more personalized and more affordable.

Session moderator Christina Farr, chief executive of consultancy Manatt Health, noted that there isn’t a lot of data available showing how many people are actually enrolled in ICHRAs right now, but London said it’s probably hundreds of thousands.

ICHRAs are based on legislation that was introduced during President Donald Trump’s first term, and their momentum was likely “stalled” during Covid, she said. That said, ICHRAs are growing, primarily among small businesses that previously weren’t able to offer health benefits, while larger employers have been more skeptical.

“I think it’s safe to say it’s going to be a trickle, a flood. And the real question is when and what’s driving the shift? … I think it’s going to take bigger companies to get on board with it,” London said. “And we definitely need the infrastructure. We need the startups that are in this space to really step up and make sure that the browsing experience, the shopping experience and just the experience having with the ICHRA administration is as seamless as possible and that will help drive momentum.”

It should be noted, however, that not everyone is as optimistic about ICHRA.

“I really wonder if any of these ICHRA evangelists have ever purchased an individual health plan? said Ari Gottlieb, director of consulting group A2 Strategy Corp, in a LinkedIn post. “What they would find, in general, are plans that have limited Medicaid-based provider networks, most lacking out-of-state coverage and excluding major health systems.”

Photo: HLTH inc.