In my book, The Lean Health Plan, I detail how the American healthcare system operates entirely outside of normal economic gravity. In any functioning free market, technology is a deflationary force. When you introduce a new efficiency, operational costs drop and competition passes those savings to the consumer, but in our multi-trillion-dollar healthcare system, a new efficiency rarely results in added value for patients or employers; it is immediately captured and extracted by the administrative machine.

We just got a perfect, terrifying preview of how this dynamic will play out in the era of Artificial Intelligence.

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Right before the holiday, the Centers for Medicare and Medicaid Services (CMS) dropped its proposed 2027 Hospital Outpatient Prospective Payment System rule. Buried inside it is a brand-new payment category for algorithmically driven care called Software as a Medical Service (SaMS). The agency has designated 36 new billing codes specifically for software-based technologies that support clinical decision-making.

This is the exact opposite of what we need. We need to demand that the free market, not the government, figure out where the value in AI lies. Right now, it is beyond crazy. This technology is in its infancy. If ever there was a more clear example of how we keep enabling one folly after another, a tragic pattern I trace through the history of our system in PART I of The Lean Health Plan, this is it.

As I explain in Artificial Intelligence Will Revolutionize Medicine But May Bankrupt Us In the Process, instead of expecting AI to make care faster, leaner, and cheaper, the bureaucratic apparatus is already working overtime to figure out how to charge more for it. The industry loves to sell these tools under the seductive promise that they will reduce doctor burnout and streamline charting, but a more “efficient” doctor in a fee-for-service model does not mean your bills come down. The administrative machine does not tolerate idle time.

Hospital administrators will simply use that newfound efficiency to increase throughput—seeing more patients and logging more codes with each passing hour. The underlying clinical care doesn’t change, but the “allowed amount” billed to the health plan certainly will.

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The cavalry isn’t coming to save us from this technological upcoding. As I emphasize throughout The Lean Health Plan, we must stop treating everyday medical maintenance like a catastrophic insurance event. To survive, employers must adopt a truly lean health plan. We must go further than simply unbundling; we have to take back control and literally get 85% or more of claims completely out of the plan by moving to a direct procurement system. Until we rip the legacy claims chassis out by its roots, the administrative machine will continue to turn every technological miracle into another tollbooth.

If you listen to the breathless enthusiasm of tech evangelists, hospital administrators, and insurance executives, you might believe that Artificial Intelligence (AI) is the ultimate silver bullet for the American healthcare crisis. We are told that AI will streamline workflows, cut administrative costs, and return the joy of medicine to doctors.

But this unbridled optimism suffers from a fatal blind spot. To understand what is about to happen, we must draw a hard, unforgiving line between two fundamentally different concepts: AI in Medicine and AI in Healthcare.

Medicine is the clinical science of healing. Healthcare, on the other hand, is the multi-trillion-dollar business and administrative bureaucracy of coding, billing, and insurance that governs how medicine is paid for. And while AI is poised to perform absolute miracles for the former, its unintended consequence will be the devastating financial optimization of the latter.

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The miracle of AI in medicine

There is no denying the miraculous potential of AI in clinical medicine. Machine learning algorithms can analyze complex protein structures in seconds, identifying novel molecular targets in days rather than decades. AI is accelerating the development of breakthrough medical devices, training surgical robots to be more precise, and spotting early-stage tumors on radiology scans that the human eye might miss.

We are going to invent better drugs and cure diseases faster than ever before, but here is the fatal catch: We are grafting these brilliant clinical advancements onto a hyper-inflated, parasitic payment engine. AI will have the unintended consequence of showing us how to invent life-saving treatments at record speed, but we are doing absolutely nothing to improve the efficiency of the underlying economic system so that employers and patients can actually afford them.

The tollbooth economy

As I outline in my book, The Lean Health Plan, the U.S. healthcare system is not a true free market. It is a transaction engine built almost entirely around friction. It is an economy of administrative tollbooths where insurance carriers, Pharmacy Benefit Managers (PBMs), and hospital billing departments extract a margin every time a patient interacts with the system. Up to 50% of every healthcare dollar is consumed by administrative waste, opacity, and bureaucratic bloat.

In a normal, competitive market, technology drives operational efficiency, and that efficiency forces prices down for the consumer. But American healthcare completely lacks the competitive characteristics that ensure savings are passed onto customers. When you introduce a hyper-efficient AI tool into a system designed to maximize revenue, the system does not magically decide to pass the savings on to the patient or the employer. Instead, it uses the technology to become a more efficient extractor of wealth. The well-organized coding, billing, and insurance industries are going to use AI to supercharge their profit margins.

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Weaponized upcoding (a warning from PwC)

If you want evidence of how this is already playing out, look no further than PwC’s recent report, Medical Cost Trend: Behind the Numbers 2027. Every year, PwC forecasts the primary drivers of healthcare inflation. For 2027, their number one cost inflator is “AI-enabled revenue optimization.”

According to the report, hospitals and medical providers are rapidly adopting AI-powered ambient scribes and clinical documentation tools. On paper, these tools are sold as a way to reduce physician burnout by automating note-taking. But the financial reality is much darker. These AI systems listen to patient encounters and automatically capture every single symptom, comorbidity, and nuance. They are explicitly trained to ensure that every conceivable diagnosis and modifier is perfectly documented to justify the highest possible billing.

The PwC report highlights early evidence that hospitals using AI scribes are seeing a measurable increase in Relative Value Units (RVUs) billed per encounter—a key driver in the billing equation.

While the underlying clinical work does not change, the argument will be made that, “doctors are finally getting paid for what they do.” Yet the patient will not receive a higher intensity of care and whether one views this as appropriate reimbursement or system-wide cost inflation doesn’t matter; for employers and patients it means the “allowed amount” billed to the health plan or patient will increase. Providers are using artificial intelligence to ensure every code with every modifier is used to systematically maximize revenue for every single visit, leaving employers and patients to foot the inflated bill.

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The myth of the "efficient" doctor

This brings us to the most seductive lie currently being sold to the American public: the promise that AI will “free up” doctors. Proponents claim that by automating administrative burdens, doctors will finally be able to slow down, step away from their keyboards, and spend more meaningful, face-to-face time with their patients.

Do not fall for it.

In a fee-for-service, revenue-cycle-obsessed system, a more “efficient” doctor does not mean the price of seeing a doctor comes down, and it certainly does not mean your doctor will sit and hold your hand for 45 minutes. The administrative machine does not tolerate idle time.

If an AI scribe saves a physician fifteen minutes of charting per hour, hospital administrators and private equity practice owners are not going to let that doctor use those fifteen minutes to build a deeper patient relationship. They are going to use that newfound efficiency to increase throughput. More efficient doctors just means doctors will be pushed to see more patients, schedule more appointments, and bill for more codes with each passing hour.

Unintended consequences

The ultimate beneficiaries of healthcare AI will not be the sick. The winners will be the massive hospital conglomerates and the large incumbent insurance organizations (which, as I explain The Lean Health Plan, are not insurance companies at all).

For the insurance carriers and administrators, more billed codes mean more transactions flowing through their proprietary clearinghouses. It means higher gross charges, which allows them to boast about larger “network discounts” and collect richer administrative fees. Because the system is insulated from true free-market competition, there is no mechanism to ensure that the operational savings generated by AI are passed down to the American worker or the corporate balance sheet.

Artificial Intelligence is merely a force multiplier. When you hand a powerful tool to a brilliant clinical scientist, they will cure cancer. But when you hand that same tool to a bloated, monopolistic administrative bureaucracy, they will use it to build a more efficient tollbooth.

AI is going to show us how to invent incredible drugs and keep people alive longer than ever before, but until American businesses step up, demand transparency, and rip the friction out of the legacy payment system, AI will just be the newest weapon used to redirect resources away from clinical care toward administrative activity, triggering ever more toll payments. We cannot fund the clinical miracles of tomorrow if we are suffocating under the AI-optimized administrative waste of today. Medicine will advance, but without structural reform, “healthcare” will bankrupt us all.

How the Medical Claim Was Used to Hijack Healthcare

In my new book, The Lean Health Plan, I explore one of the most baffling paradoxes in modern business: how corporate America completely abandoned its knowledge of supply chain management when it comes to healthcare.

Employers who ruthlessly optimize the procurement of steel, software, and logistics services somehow bought into a crazy, backwards system for purchasing medical care. But the tragedy goes far beyond corporate balance sheets. By blindly accepting this flawed model and defying everything they know about procurement, corporate America has forced everyday Americans to suffer as a result of their mismanagement.

Corporate America broke the system, and in The Lean Health Plan, I explain why only corporate America can save it.

For 95% of medical events, healthcare is not a catastrophic mystery; it is a predictable, everyday matter of consumerism or corporate procurement. Yet, both businesses and Americans have surrendered to the Big Healthcare bureaucracy.

The weapon that enabled this hostile takeover—and the root of all nearly all dysfunction in our healthcare supply chain—is the medical claim.

Bureaucratic Artifact

The first thing we need to do is fix our language: a “claim” is not a clinical event. It is a bureaucratic artifact created by an abusive payment system that is designed to extract money without returning anything of value. Claims are just the tool of extraction.

Medical coding is not necessary to produce procurement data. We do not have coding systems for any other part of our supply chains. We just have simple data.

Have you ever looked at the claims cycle? It’s the craziest thing you can imagine.

Here’s just some of it:

1. Eligibility and Coverage Verification

2. Prior Authorization Triage

3. Copay Collection

4. Care & Clinical Coding

5. Clearinghouse Transmission

6. Payer Adjudication

7. Repricing

8. EOB Production and Mailing

9. Final Billing

10. Payer Payment

11. Patient Payment

Then there are denials, appeals, and don’t forget the added mental health issues because everything above adds to the stress of daily life.

All for an annual wellness exam, or well-child visit, or a strep throat?

Oh, and don’t forget that after all of the above is done, all of your data gets aggregated by data brokers. They sell it to pharmaceutical companies, medical device firms, researchers and others. The process is called, “Data Monetization.” Sure, don’t worry—it’s “de-identified,” but it’s still your data that is being sold, often many times over. While a hospital or claims clearinghouse takes a revenue share on the sale of your data that they provide to data brokers, employers and patients don’t see a penny of that revenue. It’s the final tollbooth after all of the other tolls have been paid.

In any other sector of the economy, businesses generate purchase orders, receive detailed invoices, and pay their bills. You do not send your company’s travel expenses to a third-party “expense adjudicator” that takes a percentage of the spend, rewrites the rules midstream, and then tells you what you are “allowed” to reimburse your employee.

Healthcare is the only major category of corporate spend where we have normalized outsourcing the simple act of paying a bill to an industry that negotiates their own prices, imposes its own fees, and hides the details from us.

Americans are Highly Capable Consumers

The American economic is often referred to as a “consumer” economy. Americans are highly proficient consumers.

Our healthcare system defends the claim by arguing that healthcare is uniquely unpredictable. But we do not need complete certainty to distinguish between a truly insurable catastrophic event and everyday purchasing.

At 5 PM, I often don’t know if I’m eating in or dining out, where we might go to dinner, or what I might order. If a couple of my kids are home, that dinner costs as much as a trip to the doctor. Somehow, we manage despite the uncertainty.

We often don’t know exactly which routine trip to the mechanic for an oil change will result in being told we need new brakes, or tires. We don’t know exactly what day the garbage disposal under the kitchen sink will burn out and need replacing. We don’t know when the A/C will fail. And yet we manage these routine, moderately unpredictable expenses without a sprawling claims bureaucracy.

The current model fundamentally underestimates the American consumer. The average American makes it through life successfully navigating complex daily realities—buying groceries, keeping the lights on, and filling up their cars with gas. How is it that we have convinced ourselves they are incapable of simple medical procurement? Instead of funneling money through a bloated administrative tollbooth, why not simply give that $120 directly back to the employee in their paycheck and let them pay for a dentist appointment on their own?

We Can’t Keep Putting Bandages on a Profoundly Broken System

You cannot optimize a system that is built on the wrong model. The only way to win is to adopt a new architecture and a new culturable paradigm that stops insuring everyday maintenance and starts procuring high-performance healthcare.

We must starve the toll collector—my word for the administrative points of extraction that I use throughout the book.

As I outline in The Lean Health Plan, it is time to end the claim, and in doing so, end the administrative empire it built. Employers have the power, the capital, and the moral imperative to tear down this system. By treating healthcare like the supply chain it actually is, corporate America can reduce its healthcare spend by as much as 50% and rescue America from the impending financial disaster that is coming if we don’t act.

I hope you enjoy the book!

Amazon: https://onelink.to/lean-health-plan

Double-digit increases in healthcare costs have become the norm for small and mid-sized companies. One-third of mid-size and large employers absorbed double-digit rate increases in 2026, exceeding the general inflation rate by 3x. Many leadership teams are flipping out. A 10% increase is a heavy hit to the P&L, but when that increase compounds year after year, it begins to look like an impending crisis.

The result is a sense of helplessness and, in some cases, fear.

Fear is a powerful motivator, and it is one that can easily be abused. Desperate to find solutions to appease their clients, many benefits brokers have started aggressively pointing employers toward Individual Coverage Health Reimbursement Arrangements (ICHRAs).

The rationale is simple. Brokers can’t do nothing because they need to get credit for doing something. Even if that something really amounts to nothing at all.

Cycling health plans works, and it pays. In 2025, 92% of brokers who moved clients to an ICHRA saw their compensation increase. That compares to 64% in 2025.

But ICHRAs are not a solution to employers’ healthcare woes. They are a white flag. There is no viable, long-term solution for employers other than to self-fund, take control of their supply chain, and actively manage their exposure.

Here is why the ICHRA is an illusion, and why it ultimately fails both employers and their workforces.

1. ICHRAs do nothing to address rising costs

The fundamental premise of an ICHRA is a sleight of hand. It converts a defined health benefit into a defined financial contribution. You set a budget, hand your employees a stipend, and send them to the individual marketplace.

ICHRAs do nothing to address the underlying drivers of healthcare inflation. They don’t strip out administrative bloat, they don’t bypass opaque Pharmacy Benefit Managers (PBMs), and they certainly don’t challenge the hyper-inflated billing practices of consolidated hospital systems. The cost of healthcare remains the same, the ICHRA simply caps the employer’s exposure to it.

Meanwhile, the cost of individual marketplace plans is skyrocketing right alongside fully-insured group plans, offering only a temporary and superficial reprieve to employers. And then… they are locked in.

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2. ICHRAs create adverse selection and an affordability trap

It is vital to look at who is moving to ICHRAs. It is the companies with the absolute highest healthcare costs that are most desperate for an exit ramp, and they are the ones flocking to the false sense of safety that ICHRAs provide. This inherently injects massive adverse selection into the individual market risk pools.

Furthermore, employers cannot pretend the cost problem goes away just because they have capped their contribution. The ACA affordability requirements still stand. When a company moves to an ICHRA, they might see a small, temporary reset in their baseline by capping their initial costs. But as the adverse-selection-heavy individual market experiences double-digit premium spikes, the employer’s required contribution to remain compliant will surge right alongside it. You aren’t escaping the compounding increases; you are just delaying them by a cycle or two.

3. ICHRAs represent the ultimate in cost-shifting to employees

If the employer’s contribution is capped (or trailing the market) and the underlying cost of healthcare continues to surge, who absorbs the inflation? Your employees do.

The industry likes to dress this up as “empowering employee choice,” but the reality is much darker. When individual market rates spiked by an average of over 21% in 2026, employees on ICHRAs were forced to buy down into narrower networks and higher-deductible tiers just to afford coverage. The human toll is already visible in the data: currently, 39% of employees report delaying medical care because of cost. Pushing your workforce into a volatile, destabilized risk pool where they are exposed to extreme annual rate hikes hollows out the core value of the benefit you are paying for.

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4. ICHRAs do not promote competition in the individual marketplace

The promise of an ICHRA relies on a robust, competitive individual marketplace where carriers fight for consumer dollars, driving down prices and increasing quality. That marketplace does not exist.

With the expiration of the enhanced ACA premium tax credits, the individual market has become incredibly volatile. Major carriers routinely exit markets where the risk pools become unprofitable, leaving consumers with a shrinking list of options. Instead of driving competition, ICHRAs simply feed more lives into an unstable, heavily consolidated system where employees lack the collective purchasing power to demand better rates or better care.

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5. ICHRAs decouple risk from health plans

By retreating to the fully-insured individual market via an ICHRA, employers forfeit the most powerful levers they have to fix their healthcare. ACA marketplace plans are the ultimate fully-insured “black boxes.” They are subject to the oppressive, generalized requirements of the ACA and HIPAA that prevent you from actively managing your costs.

You cannot build a sustainable employer health strategy on an ICHRA. The moment you make the move, you give up the levers that enable you to manage costs — the localized claims data that lets you identify supply chain inefficiencies and apply AI to spot patterns, the ability to bypass traditional carrier networks, the power to carve out PBMs, the freedom to implement direct primary care, and the option to steer members to high-value centers of excellence.

6. ICHRAs are a "one-way” door

Eventually, the year-one savings will disappear and companies will see the ICHRA for what it was — a way to delay the problem, not solve it. They will need to bring healthcare back in-house to manage their costs and supply chain.

Giving up your current group plans for the ICHRA market makes transitioning back exponentially harder. You will have surrendered years of historical claims data, scattered your workforce across dozens of disconnected individual carriers, and completely dismantled your internal benefits infrastructure. You will be starting from scratch, from a position of total weakness.

A final note

An ICHRA tells your employees, “Healthcare is too expensive, so you’re on your own.” A better approach tells your employees, “Healthcare is too expensive, so we built a better system.”

Financial predictability and high-quality care do not come from capping what you pay and walking away. They come from building a real health plan, one where you control the economics instead of surrendering them. Self-fund, demand transparency, and manage your supply chain. Everything else is an illusion.

I will soon be publishing a book that explains the American healthcare system in ways you’ve likely never had it explained before. The book primarily addresses employers, but it explains the dysfunction of our healthcare system across the board. It also does something other books don’t: it tells you what to do about it. If you’d like to preview a copy, please write to me at David.Silverstein@AmazeHealth.com. All I ask for is your honest feedback.

Note to readers: Names and identifying details about the people and companies in this article have been changed to protect the privacy of those involved. (Or have they?)

A rational decision to go uninsured

Daryn is a 36-year-old father of two, ages 7 and 9. He makes about $120,000 a year as a gig worker, doing graphic design, marketing, and communications.

Last November, during ACA open enrollment, Daryn and his wife sat down to make a decision. His income fluctuates, which made estimating subsidies uncomfortable. Get it wrong, and they could face a clawback at tax time.

They took a hard look at the numbers.

The benchmark silver plan came in at nearly $20,000 a year. Even after subsidies, they were still looking at over $10,000 in premiums, plus a meaningful deductible. Everyone in the family was healthy. No medications, no specialists, no chronic conditions.

Like any rational buyer, they assessed the risk and they decided to pass.

They opted to go uninsured for the year. If something changed, they figured they could always sign up during the next open enrollment.

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When the risk becomes real

In January, everything changed.

Their nine-year-old daughter came down with what looked like a routine stomach bug, but instead of recovering, she became lethargic. They took her to the emergency room. Within hours, doctors determined she was in acute kidney failure.

She was diagnosed with Atypical Hemolytic Uremic Syndrome, an extremely rare condition where the immune system, triggered by a common infection, begins attacking the body’s own organs.

She was moved to the pediatric ICU. The care team acted quickly and administered emergency doses of Soliris, a biologic drug that can stop the progression of the disease.

The treatment worked. Her condition stabilized, but the nephrologist delivered the next reality: to keep her kidneys functioning, she would need ongoing infusions of the drug every two weeks, indefinitely.

The cost of outpatient Soliris is measured in hundreds of thousands of dollars a year. Without insurance, Daryn was facing immediate and total financial collapse. So, he adapted.

A rational response to an irrational system

Daryn identified employers offering Day‑1 health benefits. Amazon was one of them. Despite earning the equivalent of $60 an hour through his freelance work, Daryn took a full-time warehouse job paying $19 an hour.

He worked 40 hours a week at Amazon while continuing his freelance business at night.

Because he was hired while his daughter was still hospitalized, he was enrolled immediately in the company’s health plan. By the time she was discharged, the transition was seamless. The new network picked up the case, and the biweekly infusions continued without interruption.

The crisis was contained.

The COBRA exit and the ACA handoff

Once his daughter’s care stabilized, Daryn ran the numbers again.

The math was straightforward. His freelance work was still far more valuable than the warehouse job. Staying employed just to receive the employer-paid subsidy on his health insurance no longer made sense.

So, after 90 days, he quit.

He elected COBRA, paying roughly $2,000 a month to continue the same coverage. On paper, that looks expensive. In reality, it’s a fraction of the cost of the treatment his daughter requires.

Because the plan was self-funded, the claims, hundreds of thousands of dollars per year, are paid out of the employer’s risk pool. The insurance company administers the plan, but it isn’t taking the risk.

Over the next 18 months, Daryn will continue to pay his premiums under COBRA while his former employer covers the claims.

Then COBRA will end.

That event will trigger a special enrollment opportunity. Daryn will then have the chance to move his family onto an ACA plan. The plan will be required to accept his daughter, cover her condition, and continue the treatment.

The cost moves again, this time into the broader individual market.

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Who bears the risk?

Faced with a catastrophic diagnosis, Daryn found a path that preserved his daughter’s care and avoided financial ruin. But step back, and something else becomes clear. He never bore the catastrophic risk himself.

He declined coverage when the risk appeared low, he entered a risk pool the moment the risk became real, and he will transition to another pool once it is advantageous to do so.

Every step he took was rational, and every step the system allowed.

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A fragile assumption

Insurance only works if people pay into it before they need it. Risk pools only hold if healthy individuals remain continuously enrolled. The entire structure assumes a level of pre-commitment that individual incentives undermine.

What Daryn did isn’t an edge case.

Most versions of this behavior are smaller and harder to see, but the underlying dynamic is the same: individuals respond to price signals and timing, while the system depends on their indifference to both.

The result is a quiet tension at the center of American healthcare.

The protection is the problem

The laws are designed to protect people from catastrophe, and they do without question. However, those same protections also make it possible to defer participation until the moment protection is needed.

From Daryn’s perspective, skipping coverage wasn’t reckless. It was a rational calculation that, in the end, held.

From the system’s perspective, it’s a glimpse of something more fragile.

A system that works best when people behave irrationally, and still functions when they don’t, but absorbs the cost either way.

Every year, the renewal arrives with a massive, double-digit increase. The CFO grumbles, the HR director panics, and your broker sits across the table, apologizes, blames “the market,” and the dance begins.

They say they’ll go back to the carrier to “see what they can do.” They shuffle some numbers around, raise the deductible a bit, and maybe pitch you a shiny new app to help manage chronic conditions or reduce emergency room visits. Exhausted and out of time, you reluctantly sign the contract. You accept the pain because you believe you have no other choice.

If you are sitting in the C-suite waiting for your broker, your benefit consultant, or a politician in Washington to swoop in and drive down your healthcare costs, you are going to be waiting until your balance sheet bleeds out. The cavalry is not coming.

It is time to face the reality of the people you are trusting to manage your supply chain.

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The optical illusion of cost control

Under the legacy system, attempting to control costs has become nothing more than a game.

Your traditional broker has to show that they are making an effort to justify their existence. But because the core medical networks they sell are essentially identical commodities, they can’t actually negotiate the price of your care. So, they pitch “innovative” point solutions. They boast about tackling emergency room utilization or sending your diabetic employees through a new management portal.

Let’s call this exactly what it is: an optical illusion.

There is virtually nothing they can do to move the financial needle from inside the legacy box. Tinkering with ER visits doesn’t stop a massive regional hospital from charging you $4,000 for a routine MRI that costs $400 down the street. A wellness app does absolutely nothing to stop a Pharmacy Benefit Manager (PBM) from extracting a massive spread-pricing markup on a generic pill.

They are showing you effort, but the effort is entirely misdirected.

Ignorance or negligence?

So why don’t they pull the levers that work?

It is easy to take the cynical view. We know the legacy brokerage compensation model is fundamentally rigged. When your advisor is paid through percentage-based commissions, hidden backend overrides, and volume bonuses from the supply chain, they aren’t working for you. They are operating as an outsourced sales force for the legacy carriers. They are financially penalized for saving you money and rewarded for driving up your costs.

But there is a less cynical, and perhaps much sadder, view.

The truth is that many traditional brokers simply do not know how to fix your plan. They have not become students of the system. They don’t understand the underlying plumbing. They are not masters of alternative plan design, transparent pass-through PBMs, direct contracting, or Virtual Direct Primary Care.

And in their defense, few of them are familiar with the details of how deep the PBM shell games really go. They just rely on the carrier to do the thinking for them. Benefit consultants who put all of their clients into bundled, off-the-shelf BUCA (Blue Cross, United, Cigna, Aetna) Administrative Services Only models may not be intentional thieves, but at a minimum, they are guilty of extreme negligence.

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The levers are jammed

Even if your broker suddenly woke up tomorrow and wanted to fix your plan, the legacy system has completely jammed the levers required to do it.

When you purchase a bundled ASO plan from a legacy carrier, you are not buying a health plan; you are committing to paying a neverending fees to their a carrier’s administrativea tollbooth. You are surrendering to a system of fees you don’t understand, fees you don’t choose, and fees you don’t control.

To reduce your healthcare spend, you must demand the same procurement freedom for your health plan that you demand for every other operational spend in your business. You would never hire a Chief Procurement Officer for your manufacturing line and then legally forbid them from negotiating the cost of raw materials. But as long as you are locked inside a BUCA contract, you are forbidden from sourcing cheaper international specialty drugs, bypassing the PBM cartel, or paying a local independent doctor a fair cash price.

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Choose your ecosystem

Your benefit consultant is not going to voluntarily disrupt their own revenue stream to build you a transparent, independent operating system. They are not going to change your plan design unless you insist on it. Frankly, they won’t insist on it themselves unless they know they will lose your business if they don’t.

The traditional strategy of acting as a passive buyer is a death sentence. You have to choose your ecosystem.

You must transition from being a passive buyer of an off-the-shelf insurance product to the active owner of a customized healthcare plan. You must redefine your broker as a fiduciary, fee-based advisor who sits entirely on your side of the ledger.

Your legacy carrier is not going to innovate its way out of their own profits. If we are going to dismantle the 50% administrative waste crushing the American economy, the mandate must come from the ground up.

Employers are the only ones with the power, the capital, and the fiduciary imperative to act. Employers are the only ones who are going to save employers.

In the first installment of our series on share plans, we explored why healthcare ministry share plans, commonly called “share plans,” are poised to proliferate. Rising premiums for Affordable Care Act (ACA) compliant insurance have left millions of Americans searching for alternatives, and share plans are filling that gap. Before you sign up, it’s critical to understand what these plans are, and what they are not.

Share plans are not insurance

This is the most important point. Share plans operate outside the regulatory framework that governs health insurance. They are voluntary cost-sharing arrangements, not legally binding contracts. If your medical needs meet their guidelines and funds are available, they may help pay your bills. If not, you’re on your own.

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What to look for before you join

If you’re considering a share plan, here are the key factors to evaluate:

Coverage guidelines
Every share plan has strict rules about what expenses are shareable. Many exclude:

• Pre-existing conditions (sometimes for years)

• Preventive care, mental health, and prescriptions

• Maternity care unless certain conditions are met

Read the member handbook carefully. If you have chronic conditions or anticipate major medical needs, these exclusions could leave you exposed.

Caps and limits
Unlike regulated insurance, share plans often impose:

• Annual or lifetime caps on what they will share

• Per-incident limits (e.g., $125,000 per illness unless you buy an upgrade)

These limits matter if you face a serious illness or accident.

Waiting periods

Coverage for certain conditions may not start immediately. Pre-existing conditions and maternity care often have waiting periods of 6–12 months or longer.

Monthly costs vs. out-of-pocket

Share plans typically cost 50–70% less than ACA-compliant insurance, but you’ll have:

• A Member Responsibility Amount (MRA), similar to a deductible, before sharing kicks in

• Responsibility for negotiating discounts and paying providers upfront in many cases

Provider flexibility

Most share plans don’t use networks, which means you can see any doctor, but you may need to pay cash and submit bills for reimbursement. Some plans offer Preferred Provider Organization (PPO) access or bill negotiation services, which can be a big advantage.

Transparency and financial stability

Because these plans are unregulated, you need to do your homework:

• Check if the organization publishes audited financials

• Look for a strong track record of paying eligible needs

• Larger, established organizations tend to be more reliable than newer or smaller ones

Lifestyle and faith requirements

Many share plans require members to adhere to certain lifestyle standards, such as abstaining from tobacco or illegal drugs, and some require a statement of faith. If you prefer a secular option, you can find those, too. The religious affiliation is slowly falling by the wayside as these plans become less about religious exemption and more about an unregulated alternative.

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Understand the risks

Joining a share plan is a calculated risk. There is no legal guarantee of payment, no appeals process, and no state oversight. If funds run short or your need doesn’t meet the guidelines, you could be left paying the bill yourself.

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The bottom line

Share plans can make sense for healthy individuals who want lower monthly costs and accept the risk of limited coverage. They are not ideal for anyone with chronic conditions or high-cost medical needs. Before you join, read the fine print, understand the exclusions, and weigh the risks against the savings.

If you’d like to learn more about health share plans, read, “The Rise of Share Plans.”

As the cost of ACA-compliant health insurance continues to climb beyond the reach of millions, a growing number of Americans are turning to an alternative that was once considered fringe: healthcare ministry share plans, or simply “share plans.” These arrangements, originally rooted in religious communities, promise lower monthly costs and a sense of solidarity. But beneath the surface, they operate as essentially unregulated health insurance—offering freedom for the healthy and financial peril for the chronically ill because of the lack of complementary products designed to manage longer term risk.

Expect these plans to proliferate, not because they are better, but because for many, they are the only option left. As a result, we have to ask ourselves whether, in some small way, these plans might offer some clues as to how to get our system back on track. After all, the lack of regulation represents the ultimate in free marketing innovation, and many people participating in such plans appear satisfied with their limited benefit.

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A brief history of share plans

Share plans began decades ago as faith-based initiatives, designed for members of religious communities to pool resources and help each other with medical expenses. They were small, community-driven, and operated on trust rather than legal obligation. For years, they existed quietly on the margins of the healthcare system.

The Affordable Care Act (ACA) unintentionally accelerated their growth. When the ACA mandated that most Americans carry health insurance or pay a penalty, it carved out an exemption for members of recognized healthcare sharing ministries. This exemption gave share plans a legal foothold and a marketing opportunity. Suddenly, these plans weren’t just for small religious groups; they became a national alternative for those seeking to avoid the ACA’s mandates and costs.

The nature of share plans

Share plans are not insurance. They make this point repeatedly in their marketing, and for good reason: by avoiding classification as insurance, they sidestep state and federal regulations that govern coverage, solvency, and consumer protections. Members pay a monthly “share,” which is pooled and used to pay other members’ medical bills. But there is no contractual obligation to pay claims. If funds run short or administrators decide a claim doesn’t meet their guidelines, the member is out of luck.

This lack of oversight means share plans can exclude pre-existing conditions, impose caps on coverage, and deny claims at their discretion. They often require members to adhere to lifestyle standards, such as abstaining from tobacco or excessive drinking, and some even require statements of faith. While marketed as community-driven, they function more like voluntary risk pools with minimal accountability.

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Why they appeal to the healthy

For healthy individuals and families, share plans can look like a lifeline. Monthly costs are often half, or even a third, of ACA-compliant premiums. For someone who rarely visits a doctor, the savings are substantial. The plans also appeal to those disillusioned with traditional insurance, offering a sense of autonomy and shared values.

Marketing reinforces this appeal with glossy brochures and websites emphasizing community, freedom, and faith. For many, the choice feels empowering, that is until they get sick.

The downside for the chronically ill

Share plans are not designed for people with chronic conditions or high-cost medical needs. They typically exclude pre-existing conditions for months or years, and even when coverage applies, payments are discretionary. There are caps on annual and lifetime benefits, and members have little recourse if a claim is denied.

Stories abound of families facing financial ruin after relying on share plans for major medical events. Unlike regulated insurance, there is no guarantee of payment, no appeals process, and no state oversight. For the chronically ill, these plans can be a gamble, and often a losing one.

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The economic pressure driving growth

The real driver behind the rise of share plans is not ideology, it’s economics. ACA-compliant plans have become prohibitively expensive for many middle-class families, especially those who don’t qualify for subsidies. Premiums and deductibles have soared, leaving millions with a stark choice: pay thousands per month for coverage they can barely use, or roll the dice with an unregulated alternative.

This pressure is intensifying. Healthcare costs continue to outpace wage growth, and insurers are signaling further premium hikes. As affordability collapses, expect share plans to proliferate, not because they are better, but because they are the only option for those priced out of the regulated market.

The rise of share plans is steeped in irony. These arrangements, marketed as religious and community-based, are in practice the purest expression of free-market healthcare. They operate outside the regulatory framework, free from mandates, consumer protections, and government oversight. A system designed to protect consumers, the ACA, is pushing them toward unregulated alternatives. In the name of universal coverage, we have created conditions that make coverage unattainable for millions.

What this means for the future

Share plans are no longer a fringe phenomenon. They are becoming mainstream out of necessity, not preference. For policymakers, this trend raises urgent questions: How do we protect consumers in an environment where affordability drives them to unregulated products? For families, the question is even more personal: What happens when the gamble doesn’t pay off?

The American healthcare system is at a crossroads. Share plans may offer short-term relief, but they are not a solution. They are a symptom, a warning sign that the safety net is fraying and that millions are being left behind.

Take a moment and picture the health insurance ID card your employees carry in their wallets. What logo is printed on it?

If you are like most self-funded employers, it probably bears the name of one of the massive, recognizable national carriers. Your employees look at that card and think, “I have my insurance through [Carrier Name].” And unfortunately, far too often, the executive team thinks the same thing.

It is time for a reality check: That carrier is not your insurance company. You are. Fifty years ago, American business leaders staged a quiet revolution. In the 1970s, employers realized that prepaying traditional, fully-funded premiums to insurance carriers was a losing proposition. It meant being subjected to a patchwork of expensive state regulations, paying state premium taxes, and handing over the cash flow advantages of holding capital. Worst of all, it meant that when a workforce was healthy, the insurance company kept the savings as profit. In the process, The Employment Retirement Income Security Act (ERISA) was born, federalizing self-insurance options. Employers rejoiced.

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At its core, the move to self-funding was a fight for control. It was an effort by employers to assume their own risk, bypassing the traditional insurance apparatus, and becoming the fiduciary masters of their own healthcare destiny.

But, over the last few decades, a brilliant and destructive sleight of hand occurred.

The legacy carriers realized they were losing their premium revenue to self-funded employers. In response, they pivoted to offering Administrative Services Only (ASO) contracts allowing employers to “outsource” management of their health plans to them, effectively handing control right back to those they fought so hard to wrestle it from.

Over time, these ASO models became fiercely vertically integrated. The carriers bought the Pharmacy Benefit Managers (PBMs), the clinics, and the data analytics firms. They bundled everything together into opaque, take-it-or-leave-it packages.

By adopting these vertically integrated ASO models, you are ceding the very control your predecessors fought for 50 years ago. You are no longer managing your own plan; you are simply bankrolling a legacy carrier’s profit margin while letting them dictate the rules and hide the actual costs.

That logo on your employee’s ID card? It isn’t an insurance company. It is simply the name of a provider network and administrative middleman that you are drastically overpaying.

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True self-insurance is not about financing a carrier’s black box; it is about unbundling the services, demanding radical price transparency, and actively managing your supply chain. It requires remembering that the money paying the claims is yours, the plan document is yours, and the ultimate responsibility to your employees is yours.

To fix your healthcare spend, you first have to remember who the insurer actually is. All you have to do is look in the mirror.

For decades, policymakers and industry leaders have touted value-based care (VBC) and risk-based payment models as the cure for America’s healthcare woes. These concepts dominate conferences, white papers, and legislative agendas. But let’s be honest, they’re distractions—red herrings that divert attention from real solutions. Worse, they create inefficiencies, waste resources, and ultimately reduce access to care while transferring wealth from patients to bureaucracies.

The U.S. healthcare system is the most expensive in the world, consuming more than $5 trillion per year. Layer on top of that the cost of implementing VBC and risk-based models—consultants, compliance systems, and analytics platforms—and you have a bureaucracy that rivals the clinical enterprise itself.

Market engineering is a flawed premise

If market engineering worked, we’d have solved housing affordability with “value-based mortgages” or food insecurity with “risk-adjusted grocery pricing.” Imagine charging more for processed foods because they pose higher health risks. We couldn’t even regulate sugary soda in New York City, yet we think we can redesign the entire healthcare economy. Crazy, right? Welcome to America!

Efficient markets don’t come from government tinkering. They emerge from competition, transparency, and consumer choice. Every time we layer on artificial constructs like VBC, we distort incentives and stifle innovation.

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What is value and who decides?

The term “value” sounds noble, but who defines it? Regulators? Insurers? The AMA? History offers one answer: customers define value, and in healthcare, that means patients. It seems the Chairman of the Senate Healthcare Committee has similar questions.

Is value a cure at any price? Is it three extra years of life that bankrupt a family? Or a few more months of painful survival? These are deeply personal questions, not actuarial calculations. Yet VBC frameworks often prioritize payer ROI over patient autonomy, while ignoring the “voice of the customer.”

Even the Centers for Medicare & Medicaid Services acknowledges the complexity: its new models aim for 100% Medicare beneficiaries in accountable-care relationships by 2030, but fewer than half of U.S. primary care physicians currently receive VBC payments. Let’s hope they figure out that it’s a nonsensical path before it goes too far.

The bureaucracy burden

Risk-based models create entire industries devoted to managing risk, calculating trade-offs, and gaming metrics. Hospitals hire teams to optimize coding and negotiate shared savings. Consultants thrive on the complexity. Meanwhile, patients wait longer for care because providers are busy meeting documentation requirements.

Perhaps most importantly, there’s no evidence that VBC models work at scale. Imagine if it turns out to be untrue, what does that mean for economics? I believe it would totally upend economics as we know it.

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The American contradiction

America’s economic strength lies in free markets. Yet healthcare is the least American part of our economy. It’s dominated by regulation, opaque pricing, and engineered payment schemes. Until we restore market principles such as price transparency, consumer choice, and competition, we’ll keep chasing illusions instead of solutions.

Healthcare reform should not be an exercise in market engineering. It should be a recommitment to the principles that built America: freedom, choice, and accountability. Until then, “value-based care” will remain what it is today—a well-intentioned but misguided experiment that costs too much, delivers too little, and distracts us from the true problem.

Are you paying more for healthcare than you should because of how your advisor gets paid?

Most employers would say no. After all, you hired a benefits consultant; they quoted you a flat fee or a per-employee-per-month rate, and you signed the contract knowing exactly what you’re paying.

Or do you?

Odds are, you don’t.

For consultants who work on commission or hybrid models, the fees disclosed in your contract are just the tip of the iceberg. Behind them sits a network of payments, bonuses, and perks that many employers never see. This is where significant money often flows, and it can push up both your costs and those of your employees. The wrong design of your plan can also tie your hands, preventing you (or your employees) from controlling costs as you’d like.

If you’re signing off on benefits decisions, you need to know your consultant’s full compensation structure, not just to control costs, but to make sure the advice you’re getting serves your interests and to stay on the right side of your fiduciary obligations to your employees.

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Commissions built into premiums

Some employee benefit consultants supposedly work on a “fully transparent,” fixed fee basis, forgoing commissions for the very purpose of telling you that’s exactly what they do. But did you know they often receive bonuses (not commissions ) for hitting key milestones such as securing your renewal or bringing in a certain number of new customers?

They are supposed to provide you with an estimate of these bonuses, and they are supposed to update you as those estimates change. When was the last time you saw such an estimate?

And then there are the other products you offer to your employees. Do you know what commissions your broker earns on the voluntary benefits they sell to your employees? Those would be your vision plan, dental plan, critical illness or accident indemnity plan, among others. By creating the façade of transparency on your medical plan, you open the door to all kinds of other abuse.

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Overrides and retention bonuses

For commission-based consultants, standard commissions are just the start. Many carriers also pay overrides. These are bonus payments for bringing in new business or keeping existing clients from switching. However, these bonuses aren’t based on your account alone; they can be tied to a consultant’s total volume across their entire book of business with a carrier. That empowers your broker to rationalize why it’s none of your business. But, of course, it is.

Here’s what makes overrides particularly problematic: they are often all-or-nothing. If a consultant needs to write a certain amount of new business or keep a certain percentage of clients renewing, and they fall short, the entire bonus disappears. Your renewal might be the account that pushes them over the threshold or causes them to miss it.

That can create real pressure to keep you with certain carriers, even when switching would save you money or get you better coverage. These payments can be substantial, sometimes rivaling or exceeding the base commission, and they pay month after month as long as the consultant maintains their volume targets.

These numbers seldom appear in proposals or contracts, but they help explain why the same carriers keep showing up at renewal, year after year.

Point solution vendor fees

Mental health platforms; diabetes programs; wellness apps... the list goes on. The point solution market has exploded, and many vendors pay consultants to get in front of employers.

Each time a consultant introduces a new tool, they may receive referral fees, marketing allowances, or a per-employee placement bonus. The pitch sounds good—this platform will fill a gap in your plan, engage your employees, and improve outcomes, but what you don’t see is the check the vendor writes to your consultant for making that introduction.

The next year, there’s often a different vendor solving the same problem with a new tool and a new payment. They’ll call it innovation or staying current with best practices. What it really creates is churn: a rotation of vendors that generates fees without necessarily improving your employees’ experience or your plan’s performance.

Without full disclosure, you have no way to know whether a recommendation is driven by what your population needs or by what the vendor is willing to pay.

Pharmacy and stop-loss rebates

If you’re self-funded, there may be additional layers. Some consultants collect rebates from pharmacy benefit managers, stop-loss carriers, or both.

PBMs may pay consultants through rebates, administrative allowances, or performance bonuses tied to formulary compliance and prescription volume—what drugs your employees use and how often. Stop-loss carriers may pay performance bonuses tied to claims management or retention. These payments are rarely disclosed, even though they can materially affect what you end up paying for drugs and coverage.

In these arrangements, consultants are supposed to be negotiating contracts on your behalf. Instead, they may be getting paid by the same vendors you’re trying to negotiate against.

Trips, dinners, and appreciation events

Not all compensation shows up as a check. Carriers fly consultants to conferences in resort locations. They host dinners at steakhouses. They send gift baskets, tickets to games, and invitations to exclusive events. Individually, these perks may seem minor compared to six-figure commission checks.

While many companies have conflict-of-interest rules for vendors that may apply to you, they don’t apply to your benefit consultants. Over time, these perks build loyalty to certain carriers and vendors. And that makes it harder for a consultant to walk away or recommend you do the same.

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“Free” technology that isn’t free

Many consultants offer benefits administration platforms at little or no cost. Enrollment tools, eligibility tracking, and employee portals are all included as part of the service.

Sounds great, right? Except someone has to pay for that technology. In many cases, carriers and vendors subsidize the platform in exchange for your consultant steering business their way. You’re paying for it through steered vendor selection and limited options.

Once you’re using the platform, switching becomes a hassle because your data lives there, your employees are trained on it, and your HR team has built workflows around it. The harder it is to leave, the easier it is for consultants to keep you with the vendors funding the technology, regardless of whether those vendors are the best fit for your plan or not.

Why this matters to employers

Under the Employee Retirement Income Security Act (ERISA), you have a fiduciary duty to act in your employees’ best interests when making benefits decisions. If you’re taking advice from someone with undisclosed financial conflicts, you’re not meeting that duty, and courts are paying attention.

“We didn’t know” isn’t a defense anymore. Employers who fail to demand transparency are increasingly being held liable for breaching their fiduciary obligations. The penalties are real.

I’ve been hard on brokers and benefit consultants lately. If you’ve followed my writing, you might conclude that I don’t like them, or that I view them with a certain level of disdain. To an extent, you’d be right, but it’s not the people I lack respect for. It is the system they inhabit and, by extension, the companies that demand their silence.

I learned this the hard way.

Back in 2018 and 2019, I was in the trenches of the efforts to bring real price transparency to healthcare. I authored legislation and a citizen ballot measure in Colorado. I played a significant role in shaping what we now know as the ‘Transparency-in-Coverage’ rules, the product of a June 2019 Executive Order.

During that time, I met hundreds of stakeholders, and I never met a single person who vocally opposed price transparency in private. Yet my first two efforts were defeated.

If you’re scratching your head, you should be.

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The two faces of the C-suite

I sat down with lobbyists, hospital CEOs, and insurance executives. Behind closed doors, over coffee or a beer, the sentiment was universal: “David, I agree with you. I really hope you get this done.” But when testimony began at legislative committee hearings, there was total silence from the people I’d spoken with, and in some cases, active opposition from the organizations they represented.

One hospital CEO told me flatly: “If I publicly support your efforts, my board will likely fire me.” I knew he wasn’t exaggerating.

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Where are the “real people”?

In the U.S., we have what we call “third rail issues”—topics so divisive that touching them can end a political career: guns, abortion, immigration, and so forth. On those issues, there are “real people” who will stand in the rain to protest for what they believe in. Many will even fight. There is a core of genuine, passionate humanity at the center of the debate. You can disagree with them, but you can’t deny they exist.

The fight for healthcare price transparency was different. There were no “real people” on the other side.

Think about it. No father sits at his kitchen table and says, “I really hope we keep hospital pricing a secret so I can be surprised by a bill next month.” Likewise, no mother advocates for the right of an insurance company to hide its negotiated price.

The opposition I faced wasn’t human. It was a ghost—a collection of corporations, shareholders and the associations they hire to do their bidding. They have no pulse, no soul, just bottom lines to protect.

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Survival vs. cowardice

Are the people who believe in price transparency but won’t support it publicly cowards? It would be easy to say yes, but I’ve come to understand that for most, it was more a matter of survival.

Insurance brokers and benefit consultants at the large agencies often find themselves in the exact same boat. While smaller independent brokers have the freedom to steer their clients in new directions, those at the “Big Houses” are often trapped. Bucking the system is fraught with peril. If a consultant speaks up, they put the firm’s financial incentives and carrier overrides at risk, and in turn, they put themselves at risk.

In private, these brokers tell me they know their clients are being fleeced. They admit the system is broken, but when push comes to shove, they often toe the party line.

Some are starting to break free, one-by-one, but in many cases it’s because they need to, not because it’s the right thing to do. Only when faced with the risk of losing a client after a year of big hikes in healthcare costs do they put true change on the table. They might not be cowards, but they’re also not showing courage. Courage would be proposing changes when it’s right, not when it’s required. That’s what a true, trusted advisor would do.

Brokers aren’t “bad people,” but they do work in a bad system—a system that has made honesty and transparency a liability. Until we change the incentives that force good people to act like cowards to survive, the “ghost” will keep winning.

It warrants repeating, I don’t hate brokers and benefit consultants. In fact, I like most of them—behind closed doors. What I hate is that the system won’t let them step into the light.

If you’re a broker reading this and you’re trapped in that system, know that there’s a way out. The employers who will value you most are the ones looking for honesty, not compliance.

And if you’re an employer waiting for your broker to bring you the truth? Understand that if they’re stuck in this system, they can’t save you, no matter how much they might want to.

This weekend, eight NFL teams will fight for an ultimate spot in the Super Bowl. That’s what fans will see. What they don’t see are the war rooms across the league, deep into draft preparation—evaluating talent, building boards, and working through scenarios. The draft doesn’t happen until late April, but the teams that win on draft day are the ones that started preparing months earlier. Those with the highest draft picks aren’t playing this weekend. They are even more earnestly focused on the draft.

In the first round, teams get eight minutes to pick. That’s it. Months of work will come down to a decision made under pressure, one that shapes the roster and often the season that follows. Sometimes, the player a team built its strategy around is unexpectedly scooped up by a team with an earlier pick. Other times, a prospect they expected to go early in the draft is still on the board. Either way, the clock keeps running.

That kind of pressure isn’t unique to football. Business leaders are on the clock right now, too, though many don’t realize it yet; not to draft players, but to draft their next broker or benefits consultant. That work needs to happen now, in Q1 and Q2, before renewal season hits in September and October. And if all goes right, they might choose to re-sign their broker, much as an NFL team might re-sign a player they thought they’d lose to free agency. Whether drafting new, young blood or re-signing a veteran, there are choices to be made.

Most companies wait until summer to consider reevaluating their relationship with their broker. By then, the best advisors are already committed, and renewal season becomes about who’s available, not who you actually want to work with.

This year is different. Turnover among brokers and consultants is accelerating. A fifty percent shift wouldn’t surprise me. The advisors who know how to navigate what’s coming are already being selective about who they work with this year. I love working with them. They tend to be independent brokers or, at least, independently-minded brokers at larger agencies. They know what needs to be done this year. There are still some good guys left.

If you call a broker you’ve never spoken to in a panic in September, you’ll be too late, or you’ll be ripe for being taken advantage of.

The good ones will have been drafted.

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The pressure is real

2025 delivered the steepest healthcare cost increases in over a decade. Aon and Willis Towers Watson (WTW) are projecting 8% to 14% increases again in 2026. Many saw numbers well beyond 20% in 2025. There will be many of those in ’26, too.

The problem wasn’t just the size of the increases, it was when they arrived. Renewal quotes showed up in September or October, leaving employers without time to think or room to maneuver. That’s like waiting until 30 seconds are left on the draft clock to start rethinking your pick.

Once renewal hits, you’re effectively locked in for another year. Brokers understand this dynamic. Clients churn eventually, it’s inevitable, but timing is everything. If they can string you along with promises until October, they’ve won another year.

That strategy has worked for a long time. The average broker tenure hovers around five years. COVID-19 disrupted the market in 2020, which triggered a wave of broker changes in 2021. Five years later, those relationships are hitting their expiration date, just as employers face back-to-back cost increases that make the status quo unsustainable.

The pace of change and turnover in 2026 is going to break records.

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Your next move

The broker market is about to get selective. The consultants who understand what’s coming won’t have room for everyone. I’d put the number who are really willing to do what’s right for their client at about 5%. Those are the ones you want to draft, or re-sign.

If you’re three or more years into a relationship that isn’t delivering, the window to change course is Q1 and Q2; not because there’s a magic deadline, but because by summer, the best options will already be committed. You don’t want to be that team that is going into the preseason but hasn’t picked a starting quarterback yet. That doesn’t usually bode well for an NFL team, and it won’t bode well for you.

Your renewal will arrive in September, whether you’re ready or not. The only question is whether you’ll be ready to receive the bad news from a position of strength or weakness.

Remember, you are on the clock.

In the NFL, general managers don’t get many chances to draft a franchise quarterback. Miss once, and you set the team back years. Miss twice, and you may not get a third shot.

Most HR leaders are in a similar position, whether they realize it or not.

Over the course of a career, an HR executive or chief financial officer might oversee one, maybe two broker or benefits consultant selections. That’s it. Meanwhile, brokers and consultants participate in dozens of competitive selection processes each year. They know the timing, the pressure points, and how to manage expectations to control the process.

You’re being asked to make one of the most important decisions affecting your workforce and your balance sheet with minimal practice, while the people on the other side of the table do this for a living.

That’s a lopsided game.

The general manager problem in HR

In football, the GM doesn’t call plays or throw passes, but the season hinges on their decisions. How they build the roster, how they manage the salary cap, and who they draft in the first round. Miss at the top, and no amount of execution can save you.

Choosing a benefits broker carries the same weight. Your broker touches everything: plan design, cost containment, vendor strategy, renewals, and employee experience. If they’re not performing at a high level, you’ll pay for it at every renewal for years.

NFL general managers spend their careers evaluating talent and living with the consequences. Even then, drafting a quarterback is different. It’s the pick that defines their tenure.

Most HR leaders never get that kind of practice. And the game has changed dramatically since the last time you made this pick.

That’s the seat you’re in right now.

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What’s changed since your last selection?

If you last selected a broker five or six years ago, you weren’t choosing for today’s market.

At the time, many of the tools that now define an effective benefits strategy either didn’t exist or weren’t meaningfully deployable, including:

• GLP-1s

• Transparency-in-Coverage Rules

• EHR interoperability

• Reference-based pricing

• Virtual primary care

• Commodity drug plans

• At-home lab tests

• Most wearable technologies

• Lifestyle spending accounts

• Direct provider contracting

• International drug sourcing

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Comfort is the most expensive mistake you can make

The average broker relationship lasts about five years. Not because five is optimal, but because it’s tolerable.

During COVID-19, broker turnover spiked in 2021 as employers scrambled to respond to chaos. Five years later, those relationships are aging out just as costs surge again, and the margin for error disappears.

Comfort is the problem. Long-tenured relationships tend to dull the sense of urgency. Meetings get smoother and expectations soften. “We’re working on it” starts to sound like progress. Meanwhile, renewal season arrives exactly on schedule, while your options quietly vanish.

Signs your broker isn’t performing

A franchise quarterback elevates everyone around them. An average one forces the rest of the team to compensate.

Your broker should do the same for your benefits strategy. Here are the signs they’re not:

1. They did not present you with at least one non-BUCA option in 2025. 

2. You’re still paying full price for brand-name GLP-1 drugs like Ozempic or Wegovy.

3. Your PBM charges copays that exceed the actual cost of many drugs.

4. You don’t have full transparency into drug rebates.

5. You don’t have a strategy for sourcing high-cost drugs internationally.

6. Your employees are paying out-of-pocket for basic telemedicine visits.

7. You don’t have a service to help move your highest cost claimants to government funded programs. 

8. You still have a useless Employee Assistance Program. 

If your broker hasn’t addressed these gaps, they’re not keeping pace with the market.

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What good decision-makers do

Great general managers don’t pretend to know everything. They build boards, they challenge assumptions, and they surround themselves with people who see the field differently. Most importantly, they act early.

You’re not expected to understand every corner of American healthcare. Nobody does. But you are expected to recognize when the game has changed, and whether the person you’ve trusted to guide you is actually doing their job.

You are the general manager here. Your broker is the quarterback. This season is going to force a decision, whether you make it deliberately or let renewal season make it for you.

The Seattle Seahawks and the New England Patriots earned their way to the Super Bowl this past weekend. At this level, everyone has talent. What separates the winners from everyone else? If you watched the games, you saw it in action. Preparation is the difference. Quarterbacks reading the defense; coaches calling the right plays; defenders anticipating where the receiver is going … it’s all about being prepared. When a quarterback walks to the line, he already knows what’s coming. At least that’s the goal. The other team’s job is to be one step ahead—anticipating what’s being anticipated.

You need the same approach with your benefits broker right now. Employee benefits has become a game, and you have to play to win. In an industry with words like, “revenue cycle management,” it should be apparent by now that in the game of employer sponsored healthcare, your opponents (brokers, carriers, and health systems) are playing to take as much money as they can from your company and its employees. You have to play the other side of that, keeping them from doing so. You need to play to win.

You’re likely to hear from your broker earlier than usual this year. Some are terrified of losing clients. Others will see an opportunity to take your business from someone else. Either way, you’re about to get bombarded.

Expect outreach to start in Q1. Meeting requests will pile up through Q2. By summer, it could be a frenzy.

Will you be a company in control, or will you fall into the same pattern for another year by mismanaging the clock?

The play they’re about to run

In football, the GM doesn’t call plays or throw passes, but the season hinges on their decisions. How they build the roster, how they manage the salary cap, and who they draft in the first round. Miss at the top, and no amount of execution can save you.

Choosing a benefits broker carries the same weight. Your broker touches everything: plan design, cost containment, vendor strategy, renewals, and employee experience. If they’re not performing at a high level, you’ll pay for it at every renewal for years.

NFL general managers spend their careers evaluating talent and living with the consequences. Even then, drafting a quarterback is different. It’s the pick that defines their tenure.

Most HR leaders never get that kind of practice. And the game has changed dramatically since the last time you made this pick.

That’s the seat you’re in right now.

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If you want to keep your current broker

If you like your current broker and want to give them a chance to step up, ask them to come clean. Tell them the gig is up and challenge them to present the solutions they should have been bringing all along—alternative insurance models, drug cost strategies, modern vendor approaches—not just maintenance or minor adjustments.

Set a hard deadline: May, or June at the latest. If they can’t deliver by then, you’ll know where things stand, and you’ll still have time to make a change before summer, when your best options start disappearing. Wait any longer than Q2, and you’ll find yourself locked in for another year.

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If you’re ready to evaluate alternatives

Start now. Begin educating yourself on what’s changed in the market; understand what modern benefits strategies look like and what questions to ask. If you don’t start this process immediately, the odds of making meaningful changes in 2026 drop to nearly zero.

The brokers who understand what’s coming are already being selective about who they work with. They’re choosing their clients now, in Q1 and Q2. By summer, they’ll be committed.

Championship teams study film because they know what’s coming before it happens. They don’t wait to see the formation and then react. They prepare.

You need to do the same.

You’re on the clock; and the clock is ticking!

The Super Bowl is this weekend, but for most NFL teams, the season is already over. Thirty teams are out. Their focus has shifted from winning games to building next year’s roster.

That means making hard decisions. Which players stay. Which ones go. Which expensive contracts get restructured or cut entirely, even if it means paying players who won’t be on the team.

The cost of paying out a player’s contract after you’ve released them or traded them at a discount is called dead cap money. From fans to the front office, everyone universally hates it. Paying millions to players who aren’t contributing feels like pure waste.

It’s painful, but teams do it all the time. Why? Because keeping the wrong player in place costs even more.

A lesson from the Denver Broncos

The Denver Broncos paid Russell Wilson $53 million in 2024 and another $32 million in 2025 even though he left the team at the end of the 2023 season. That’s $85 million in dead money for a quarterback who wasn’t even on their roster.

In 2024, the NFL salary cap was $255.4 million. Denver’s $53 million dead cap payment that year represented more than 20% of their total cap, an enormous number by any standard.

They did it anyway, and they are [clearly] better for it. This season, the Broncos won their first division title in a decade.

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Your dead cap problem

Many companies are facing the same decision with their benefits broker or consultant. They’re locked into multi-year contracts that felt reasonable when they were signed. At the time, the relationship worked or worked well enough. Now, the relationship isn’t delivering, but breaking the contract feels expensive enough to justify staying the course for another year.

If this feels familiar to you, don’t let the wrong question start driving your decision.

The first question to ask isn’t “What will it cost to release the current firm?” It’s “What will it cost not to?”

Consultant fees typically show up as a fixed amount (say, $500K annually) or a PEPM (per employee per month) structure. As a general rule, if that number exceeds 5% of your healthcare spend, you’re overpaying. Even at 10%, the upper limit for smaller companies, eating the cost could still make financial sense.

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The more expensive mistake

The termination fee is easy to see. It’s right there in your contract. The cost of maintaining the relationship isn’t. It’s spread across renewals, pharmacy spend, vendor contracts, and missed opportunities over the next two to three years. And it’s often much larger.

Not every dollar of healthcare inflation is controllable; experienced HR leaders know that. But some of it is structural, and that’s where underperforming relationships compound.

That $1,000 to $3,000 per employee we’ve mentioned throughout this series? It compounds every year. For a company with 500 employees, that’s $500,000 to $1.5 million annually in missed savings, inefficiencies, and unmanaged risk.

Your dead cap payment might be $200,000 or $300,000. Painful? Absolutely. But compare that to ongoing annual costs in the six, seven and eight-figure range. In many cases, one more year with an underperforming consultant can cost more than several years of dead cap payments.

That’s a calculation most employers never sit down and do.

When to walk away

Sometimes, you have to eat the dead money.

None of this means you should fire your broker tomorrow. But the cost to break your contract is not a valid reason to delay change when the relationship isn’t working.”

If your consultant hasn’t brought you solutions that other employers are already using—alternative insurance models, modern pharmacy strategies, accountable vendor approaches—staying means more years of rising costs with nothing to show for it.

At some point, you have to decide whether you’re paying for continuity or paying for progress.

NFL teams make their biggest roster decisions in the offseason because waiting until the season starts limits their options. The same is true here.

Your renewal will arrive in September whether you’re ready or not. You need to decide whether you’ll let the fear of dead cap money keep you stuck for another year with a consultant who isn’t delivering.

Championship teams don’t cling to sunk costs when better options exist. Neither should you.

You’re on the clock.

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If you haven’t already, read the entire series of ‘You’re On the Clock’ and share it with an HR leader who could benefit from it:

Part 1: The Draft for Your Next Benefits Broker Starts Now
Part 2: Are You Ready to Draft a Franchise Broker?
Part 3: The Blitz Is Coming

This was a tough year for everyone. Premiums went up, deductibles climbed, and employers found themselves paying more while their employees received less. Unfortunately, the warnings for 2026 don’t look any better. Total health benefit costs are expected to rise by 6.7%, pushing the average per-employee spend above $18,500, which is well ahead of wage growth and inflation. Meanwhile, somewhere in Washington, politicians will promise solutions. We all know they won’t deliver, because they can’t. More on that later.

First, a quick confession: When three-letter abbreviations started to dominate text messages nearly two decades ago, I was a little slow on the uptake. For years, I thought LOL meant “lots of luck,” and that’s how I used it. It wasn’t until a bewildered friend replied “HUH?” that I learned everyone else used LOL to mean “Laugh out loud.”

It was a small misunderstanding, but it stuck with me. Sometimes the best intentions meet a system, or a culture, that doesn’t work the way you expect. Case in point, American healthcare. A system this massive, this expensive, and this disconnected from the people it’s supposed to serve can leave you shaking your head, or sometimes wanting to LOL, because the only reaction left is to laugh.

However, to the politicians who keep promising they’ll “fix” American healthcare, I still say, “Lots of luck.”

The rest of this article comes with another LOL: “Lots of love.” Because I truly hope it opens eyes. We will never make any progress until we acknowledge the true drivers of our healthcare costs. Right now, I don’t hear anyone talking about the real problems.

Out of love for every American, I pray that everyone embraces the need for greater understanding.

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The bill that keeps growing

That $18,500 figure isn’t an anomaly. It’s the fourth straight year of increases above 5%, following a decade when costs grew around 3% annually. In 2025, premiums rose faster than employees’ wages, forcing employers to raise deductibles, hike copays, and shift more costs onto workers who can least afford it. Next year won’t be any easier. Employees’ share of coverage costs typically rises at the same rate as total costs, meaning affordability will be an even bigger challenge.

Employers are already doing everything they can, building narrower networks, adding plan options, and following their brokers’ advice. It’s not enough.

Policymakers in Washington will continue promising relief—another bill, another reform, another administrative “fix” that will finally bend the cost curve.

They’re lying to you. Not maliciously, perhaps, but lying nonetheless. As uncomfortable as it may be to acknowledge, the truth is our government cannot engineer a better healthcare system. It has never been capable of doing so, and every time it tries, your costs go up.

The unvarnished history of modern American healthcare 

If you want to understand why healthcare costs keep rising, you have to look outside of healthcare. The system you’re paying for today didn’t start in a hospital; it started with our military.

In the early 1900s, the U.S. Department of War (renamed the Department of Defense, and now back to the Department of War at an estimated branding cost of $2 billion) formalized the use of cost-plus contracts, the practice of reimbursing contractors for all approved costs, plus an additional profit.

They were widely adopted during World War I and World War II to encourage businesses to produce war materials quickly without worrying about the unpredictable costs of materials and labor during wartime. Then, throughout the Cold War, cost-plus contracts were used to build military capacity at any cost. Regrettably, they delivered more than might; they delivered waste in the form of billion-dollar overruns and $640 toilet seats because there was no incentive to control costs. The more they spent, the more they earned.

In his famous farewell address, President Eisenhower warned us about the military-industrial complex, cautioning that it would breed inefficiency, runaway spending, a lack of market discipline, and corruption.

Then, in 1965, Congress made the same mistake with healthcare.

When Medicare launched, it adopted cost-based reimbursement. Hospitals were paid for all “reasonable costs” plus a margin, just like defense contractors. There was no penalty for spending more, no connection to value, or pressure to be efficient.

Costs exploded.

Just as the defense industry led all other nations with unmatched spending, Americans soon found themselves leading the world in healthcare expenditures. The same public that once took pride in military investment came to disdain the spiraling costs of healthcare. The paradox stems not from the nature of the service, defense versus health, but from the persistence of a reimbursement method that rewards volume rather than efficiency or value.

The defense industry eventually learned. Slowly and grudgingly, it has moved in recent years toward competitive procurement. Healthcare has yet to learn its lesson. The cost-plus mindset remains embedded in every payment system, every regulation, and every reform. And why not? The result is very lucrative.

The 1983 “fix” that created the billing industrial complex

By 1983, Medicare spending was spiraling out of control. Congress panicked. They needed to rein in costs. Instead, they responded by doubling down on intervention. The Prospective Payment System (PPS) and Diagnosis-Related Groups (DRGs) were introduced, which paid hospitals a fixed, predetermined amount for each case regardless of actual costs.

In theory, this should have worked. Hospitals would have an incentive to provide care efficiently, since they’d keep the difference between the fixed payment and their actual costs. But hospitals are businesses, and we all know businesses don’t accept lower revenues. They find ways to adapt. Although it was unintended, in hindsight, what followed was entirely predictable:

1. Upcoding became an industry.
   If Medicare paid more for a complex case than a simple one, hospitals documented more complexity. Medical coding systems, once a simple tool for categorizing diseases, became the central financial instrument of healthcare. Entire departments were built around maximizing “case-mix index” and documenting the most severe diagnosis that could be justified.

2. Care shifted to less regulated outpatient settings.
   Until recently, DRGs only covered inpatient care, so hospitals moved procedures to outpatient facilities, ambulatory surgery centers, and other venues where they obtain more generous reimbursements.

3. Consolidation accelerated.
   Larger hospital systems could hire more coders, negotiate better rates with commercial insurers, and achieve economies of scale in gaming the payment formulas. Regional health systems merged into near-monopolies. As a result, competition decreased and healthcare prices went up.

4. Administrative costs skyrocketed.
   The complexity required to navigate DRG payments, document for maximum reimbursement, and manage multiple payment models required armies of administrators. Healthcare’s administrative burden is now a material driver of spending.

Rather than driving costs down, the government-imposed payment system industrialized revenue optimization. Sadly, patient care was no longer the central goal. Navigating a complex web of codes and rules to protect financial margins became the administrative focus.

Every one of these adaptations was a rational business behavior. That said, I don’t believe the system was broken by market forces. Healthcare was broken by payment models that were designed by people who didn’t understand markets. These models were then embraced by those who understood all too well.

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States added accelerants to the fire with anti-competitive regulations

While Medicare was creating perverse incentives, states were busy erecting barriers to competition. Certificate-of-Need (CON) laws were passed in most states, ostensibly to prevent “overbuilding” of healthcare facilities. The theory was that too many hospitals would lead to wasteful duplication and higher costs.

The reality was the opposite. CON laws require anyone wanting to open or expand a healthcare facility to first obtain government permission. They must prove that the community “needs” the facility. Existing hospitals get to weigh in, essentially giving incumbents veto power over potential competitors.

This is not how markets work. In a functioning market, if an incumbent is overcharging or underperforming, a competitor enters and takes market share. The threat of competition disciplines prices and improves quality.

CON laws eliminate that threat. They protect established hospitals from new entrants. They ensure that regional monopolies can maintain high prices without fear of being undercut.

Far from controlling costs, these laws fostered the very market consolidation that drives prices higher today.

You’re paying those monopoly prices right now.

The ACA doubled down on a broken system

Fast forward to 2010. Healthcare costs are still rising and millions lack insurance. Washington promised a comprehensive solution that we’ve all come to know as the Affordable Care Act (ACA).

The ACA succeeded in expanding coverage. That’s worth acknowledging, but expanding coverage inside a dysfunctional economic model doesn’t make that model work. The ACA treated a symptom, lack of insurance, while leaving the underlying disease untouched: distorted pricing, consolidated market power, disconnects between supply and demand signals, and decades of misaligned incentives.

You likely noticed your premiums didn’t go down after the ACA. They went up. Your employees’ deductibles and out-of-pocket expenses didn’t shrink, they grew. Now, for those eager to blame the ACA and call for its repeal: don’t misread this as a political critique. The ACA is a minor player in a sixty-year story of structural failure. It didn’t create the broken system. It tried to expand access within it. That was a fool’s errand.

Repealing the ACA without confronting the foundational problems would simply unleash chaos. You’d expose millions to the constraints of the same broken system the ACA, however imperfectly, tried to address. The DRG-based administrative pricing would still be there, the revenue-optimization incentives would still be there, and the anti-competitive barriers would still be there.

The problem isn’t that the ACA didn’t go far enough. The problem is that it marched further in the wrong direction toward more complexity, more administrative control, and more government engineering of a system that cannot be centrally planned.

So where does that leave us?

The current trajectory is not sustainable. Healthcare now consumes 17.6% of GDP. By 2033, it will reach 20.3% ($8.6 trillion). One-fifth of everything we produce will go to healthcare.

This means your costs will continue rising faster than your revenues, your employees will shoulder more of the cost, and your ability to invest in wages, technology, and growth will continue shrinking.

If we haven’t already, we are reaching a tipping point. Something is going to break. Either employers will stop offering coverage, triggering a crisis, or the government will impose price controls, triggering shortages and rationing.

What would fix this?

Each layer of bureaucratic engineering, from payment systems to price controls, has failed. This is because a system as dynamic as healthcare cannot be centrally planned. Every administrative “fix” creates new loopholes and prompts compensatory behaviors that lead to more complexity and cost, requiring yet another layer of regulation.

It is a fallacy to believe we can engineer our way to affordable healthcare. Greed is a human constant, present in any economic system. The function of a true market is to harness self-interest through competition, forcing providers to compete on price and quality to win customers. Our current system does the opposite; it rewards navigating bureaucracy.

If we are serious about fixing healthcare, we must start trying to liberate it. A genuine market-based solution would require bold, fundamental changes:

1. Radical price transparency: Prices for services must be simple, clear, and available upfront, allowing patients to shop for care just as they do for any other good or service. Not buried in chargemasters. Not negotiated in secret. Transparent.

2. Elimination of anti-competitive barriers: Repealing CON laws and other regulations that limit the entry of new, innovative providers would unleash competitive pressure on established players. We need to let competitors enter and let the market work.

3. Consumer-directed financing: Empowering patients with tools like Health Savings Accounts (HSAs) combined with catastrophic coverage insurance plans restores their role as active consumers, making them sensitive to the cost of routine care.

4. Pro-competition rules: Outlawing contracting clauses that prevent insurers from steering patients to lower-cost, high-quality providers would enable true price competition.

And, yes, the coding system has to be blown up.

These are the pillars for a functioning market. The path to affordable, high-quality healthcare lies in dismantling the broken administrative state that created this crisis and finally allowing the discipline and dynamism of the free market to work.

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What employers can do now

Change will not come from legislation. It will come from employers who refuse to keep funding a broken system. So, what can you do right now? More than you think.

1. Demand real transparency. Not “chargemaster” prices that no one pays. Demand real prices for the care your employees receive. If a hospital won’t tell you what a procedure costs before it’s performed, you shouldn’t contract with them.

2. Steer to value, not networks. Stop buying broad networks full of high-cost, low-quality providers. Build narrow networks around providers who deliver outcomes at reasonable costs and exclude those who don’t.

3. Stop negotiating from weakness. You’re one of the largest purchasers of healthcare in your market. Act like it. Reference-based pricing, direct contracts, centers of excellence—these tools exist. Use them.

4. Make healthcare a C-suite issue. This is no longer an HR benefits problem. It’s a strategic business issue that belongs in the CFO’s portfolio. Manage it like you manage any other major expense.

The path forward won’t be smooth. Incumbent providers will push back, but doing nothing guarantees your costs will keep rising at rates that threaten your business.

It’s time to choose love

No one wants to hear that sixty years of government intervention cannot be fixed with better government intervention. We want to believe that problems have solutions and that experts can engineer better outcomes.

But it’s true, nonetheless.

The only force powerful enough to fix American healthcare is the one we haven’t truly tried: genuine market competition, where prices are transparent, consumers have choices, and providers compete on value.

It’s time to start preparing for your 2026 renewal. So, here is my final LOL:

Lots of luck if you’re waiting for Washington to rescue you. You’ll need more than luck to survive rising premiums, higher deductibles, and costs that climb faster than wages.

Laugh out loud if you must at the absurdity of a system this expensive, this complex, and this administratively bloated. Sometimes disbelief is the only rational response.

But most of all Lots of love.

Because if we truly care about our companies and the future of America, we can’t just laugh and hope. We must act. That means demanding transparency, building competitive networks, and negotiating with strength. Most of all, treat healthcare like the strategic business challenge it is.

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Share this with every CFO, HR leader, and business owner who’s tired of being told the next administration will finally fix healthcare. Drop me a line at David.Silverstein@AmazeHealth.com. Your current insurance broker or employee benefit consultant is not likely to steer you in the right direction. Ninety-plus percent of them have fallen victim to earning too much money while doing too little work. It’s time for you to rethink everything.

Who are the most expensive people on your health plan—employees or their family members? If you can’t answer that question, you may be overlooking a major blind spot.

No employer wants to see an employee’s child hospitalized, but it happens. And when it does, the six-figure bill hits your plan just the same, whether it’s the employee or their dependent. Once they exceed their out-of-pocket maximum, the cost is yours.

Dependents often account for a disproportionate share of catastrophic claims. While exact percentages vary by dataset, stop-loss carriers consistently report that 40–60% of their highest-cost claimants are dependents. Sun Life’s analysis of 60,000 stop-loss claims found that newborn and infant care, along with congenital anomalies, are among the top drivers of million-dollar claims. In fact, neonatal and congenital conditions frequently rank among the top 10 highest-cost categories, with individual cases reaching as high as $8 million.

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Cancer and chronic conditions among spouses also rank high. Reports from UnitedHealthcare and QBE, another major stop-loss carrier, show that neoplasms (cancers) and circulatory diseases are leading causes of excess-loss claims. These conditions affect both employees and spouses, but spouses tend to skew older, making them more likely to generate high-cost cancer or cardiac claims.

Yet employers invest almost nothing in promoting care for family members. While insurance brokers and benefits consultants have sold employers on gimmicks like biometric screenings, health fairs, and step challenges, I’d wager fewer than one in a hundred companies pay meaningful attention to family health. And yet, the data tells us that’s where half the cost lies.

How self-funded plans really work for families

By law, employers must cover at least 50% of the employee’s health insurance premium. They’re not required to contribute toward spouses’ or dependents’ premiums , so employees often pay the full family premium themselves. Employers have little incentive to cover family premiums, and by not doing so, they implicitly encourage spouses to use their own employer’s plan. That’s not irrational. Covering family members, regardless of who pays the premium, effectively doubles an employer’s claims exposure.

The grand illusion

When I speak to employers, I encounter a pervasive fallacy: because they don’t subsidize family premiums, they assume they’re not spending much on family members. However, premiums are unrelated to claims. Once someone is on the plan, the plan pays—dollar-for-dollar—the same whether it’s the employee, a spouse, or a child.

Meanwhile, most employer health strategies focus almost exclusively on employees. Wellness programs run through company email. Care navigation assumes people work in the building. Disease management operates during business hours. So, who’s managing the spouse’s diabetes? The child’s asthma? Prenatal care for a pregnant nineteen-year-old?

A lack of data, insight, and action

Most HR teams lack visibility into dependent health. Without insight, employers try to control costs without understanding what’s driving them. When a preventable condition spirals into a catastrophic claim, it feels like bad luck. It’s not. It’s bad information.

One unmanaged condition, especially among dependents, can destabilize your entire plan. Stop-loss premiums spike. Plan performance deteriorates. Wellness ROI evaporates. And yet, participation rates may look great, leaving everyone wondering why costs keep climbing.

By focusing only on employees, you’re leaving half your risk and much of your cost unchecked.

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Where to start

Managing healthcare as a business expense, not just an HR benefit, starts with asking questions that rarely get asked:

• Who are your high-cost claimants—employees or dependents?

• What conditions are driving your spend?

• Which family members are slipping through the cracks of your wellness and disease management programs?

Once you have the answers, you can act. Extend care navigation to spouses and children. Make sure families with chronic conditions know what resources exist. Use data to anticipate and prevent expensive claims rather than just reacting. That’s how insight translates into savings and better outcomes.

A dollar saved by helping a dependent get timely care is the same as a dollar saved anywhere else. A 14-year-old who winds up in the ER because of poorly managed sports-induced asthma is an avoidable ER visit just like the one that results from a 45-year-old’s unmanaged type II diabetes.

Self-funded plans give employers control over healthcare costs, but control depends on visibility. If you can’t see what’s driving spending, you’re not managing risk; you’re just reacting to it.

The next major claim on your plan probably isn’t coming from someone in your office. It’s likely coming from someone at home.

And that’s worth fixing.

The time has come to call a spade a spade. While the conduct of the healthcare industry infuriates me, nothing is more maddening than the inane political banter and journalistic commentary that fails to talk about the real issue.

The issue is not corrupt insurance carriers, though they are truly corrupt. It’s not greedy, administratively bloated hospital systems, though they are undeniably greedy and bloated. Nor is it the dominance of “non-profits” that do in fact operate like for-profit enterprises.

The real problem is obvious, though we pretend it isn’t. The U.S. government cannot fix the problems that plague the American healthcare system.

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The scale of the challenge

The American healthcare system is a $5 trillion economy unto itself, tightly entwined with a government that foots half the bill, at the expense of taxpayers. By most measures, U.S. healthcare is the third-largest economy on the planet, only behind the United States as a whole, and China. It’s bigger than the entire economies of Germany, Japan, and India. Think about that: we’re trying to engineer an economy that is larger than the economies of more than 95% of the countries on earth.

And yet, every election cycle, politicians promise to “fix healthcare” as if it were a pothole or a tax loophole. Journalists amplify these promises by asking politicians how they’ll do it. Yet they never ask the two most obvious questions:

1. Can it be done?

2. How can our government engineer a better healthcare system when it has never successfully engineered a better market for anything else?

The myth of legislative solutions

If we can successfully engineer a better healthcare system through legislation, can’t we also engineer better markets for automobiles, real estate, or food? Time and again, history proves we cannot. So why do we think healthcare is different? Does calling it “essential” give the government some unworldly power to fix it? Is it more important than food and shelter?

The Affordable Care Act (ACA) is a case study in this fallacy. While I believe the ACA was well-intentioned, it was so contrary to a market-based solution that it has led us to this most unstable place. It didn’t drive down costs, improve access, or enhance quality. What it did was add complexity, distort incentives, and accelerate consolidation—pushing a system that was already on the wrong path closer to collapse in the interest of political expediency.

The free market: History’s most powerful force

The free market is the most powerful force the world has ever known. It defeated Germany (twice), Japan, and the Soviet Union. It has lifted billions of people out of poverty and driven innovation at a pace no government could ever match. And yet politicians, and the people who elect them, seem to think that through sheer force of will, law, and executive action, they can fix the system.

It’s absurd.

Markets work because they harness decentralized decision-making. They reward efficiency and punish waste. They allocate resources based on value, not political influence. Government, by contrast, operates through central planning—a model that has failed everywhere it’s been tried.

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The coming collapse

There is only one option, as distasteful as it may be: we must unleash the free market. Yes, it’s going to be messy; it’s going to take time; and I believe we are going to experience ten to twenty years of chaos, misery, and in many cases, lives cut short by a system that should have protected them.

However, it will be worse if we refuse to begin.

On its current trajectory, the system will all but collapse within 36 months. Costs are rising far faster than Gross Domestic Product (GDP). Employers are buckling under the weight of premiums. Government programs are consuming an ever-larger share of tax revenue. Hospitals are consolidating into regional monopolies. Insurers are gaming risk pools. And patients are drowning in debt. It is not sustainable.

When a system teeters on the edge, it doesn’t negotiate. It breaks, and when it does, the pain lands hardest on those who rely on it most. American healthcare is nearing that point of instability, and change is coming whether we like it or not.

Sacrifice and innovation

There have been many times in American history when we had to make great sacrifices. We fought World War II because not fighting would have been worse. We didn’t know what the cost would be, but we knew we had to fight. This is that kind of moment.

While I wholly object to pure destruction without a plan, the reality is that we cannot simply decree a better system. That’s not how markets work. We need innovation and experimentation, entrepreneurs willing to challenge entrenched incumbents, and employers willing to rethink benefits.

We also need Americans—a.k.a. consumers, who are empowered with knowledge, transparency, and choice.

This will not happen overnight. It will require courage, capital, and compassion. Fortunately, markets, when unleashed, have a way of transforming even the most entrenched systems, often with remarkable speed.

Yet there will be consequences. Just as I cannot imagine a single mother saying, in 1870, that “I’m so glad we fought that war. It cost me my husband and two of my three sons, but it was worth it.” Not one. Yet more than 150 years later, through only the eyes of history, we romantically talk about the sacrifices that held the union together and freed the slaves.

The same will be true here. No one alive today will say, ‘I’m glad we let our healthcare system implode.’ The path ahead will be turbulent and painful. But in time, history may show this as the turning point—the moment we finally reclaimed control and reshaped healthcare for the better.

What must happen now

We must stop waiting for Washington to fix it. There is no legislative miracle coming. Real change will come from the ground up with employers, innovators, consumers, and investors who refuse to accept the status quo.

• Employers must stop buying blind. Demand line-of-sight into every dollar spent and steer members to care that delivers outcomes, not markups. Make managing healthcare as important as any other cost.

• Innovators must build business models that reward better care, not more care — and be willing to compete on cost and results. Innovators innovate because markets provide opportunities and for no other reason.

• Consumers must insist on knowing the truth: what care costs, what it delivers, and take ownership of their health decisions. Make the decision now to educate yourself and your family. Teach your children.

• Investors must stop pouring money into consolidation and start backing those willing to tear down what’s not working. If ever there was a need for ethical investing, this is it!

The hard truth

Doctors are taught that their job is to relieve pain. Yet the hard truth is that fixing healthcare in America is going to hurt. It will threaten power and profit, and it won’t happen neatly. Yet doing nothing will be far worse. Millions depend on a system that’s failing them every day. Every delay, every excuse, every false promise keeps people trapped in a system that can’t deliver care, protect dignity, or sustain life—and too often, it bankrupts them for trying.

It’s time to stop waiting for a rescue. The free market is the only force strong enough to fix American healthcare, and the only one we haven’t truly tried.

Employers are starting to ask uncomfortable questions. Who does my broker work for? Why do my costs keep rising while my coverage keeps shrinking? And in a world where I can buy a car, a house, or a plane ticket directly, why do I still need a middleman to buy healthcare?

These questions are long overdue. History shows that middlemen don’t last forever. When a bridge that once connected buyer and seller becomes unnecessary, it can quickly turn into an obstacle.

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When the bridge becomes the barrier

Middlemen didn’t begin as villains. They solved real problems for markets that were fragmented, opaque, or impossible to navigate.

A century ago, Ford couldn’t sell cars in California without a local dealer. The dealer was a vital connection, linking a manufacturer hundreds of miles away to customers who otherwise had no way to reach them. Today, Tesla sells directly to consumers online. Yet in some states, laws still prohibit direct-to-consumer auto sales—a legacy preserved by lobbying and regulation.

Insurance followed the same path. In the early 20^th century, someone in Omaha buying life insurance from a company in Connecticut needed a local agent. That agent was the bridge. Today, consumers can compare and purchase insurance online in minutes. The need for a local intermediary has vanished.

Travel agents gave way to Expedia. Stockbrokers yielded to E-TRADE and other popular direct trading platforms. Taxi dispatchers were replaced by Uber. Each relied on exclusive access to information until technology made that information public.

This story continues to play out across major industries. As transparency rises, the middleman’s grip weakens. That begs the question: are employee benefits brokers next?

The employee benefits conflict nobody wants to discuss out loud

At first glance, a benefits consultant seems to help employers select and manage health plans. That sounds straightforward enough. But scratch the surface, and you’ll find incentives that don’t always line up with the employer’s best interest.

Most brokers are paid by insurance carriers, not by the employers they claim to serve. Their income grows with the size of the premium, creating a powerful conflict: when higher costs bring bigger commissions, efficiency isn’t rewarded, and no one has reason to fight for it. If you’ve ever wondered why your broker seems calm while your renewal spikes 8% yet again, that’s the reason.

The Consolidated Appropriations Act of 2021 requires brokers to disclose all compensation—commissions, bonuses, overrides, carrier payments. In practice, though, most employers I speak with don’t even know if they’ve received these disclosures. And why would a broker volunteer the information if they’re not pressed?

It’s not that brokers are bad people. It’s that the system is built around incentives that reward the wrong outcomes. And when a system rewards the wrong thing, it simply produces more of it—year after year. Employers end up paying more for less.

An industry built to protect itself

No middleman gives up ground quietly. Car dealerships still lobby to block direct auto sales in many states. The health insurance world has its own version. There are rules, relationships, and incentives designed to preserve the old model. Over time, regulation, tradition, and money have built a fortress that protects the system, not the customer.

But fortresses don’t last forever. Protectionism only delays disruption. It never prevents it.

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What comes next

Employers have more leverage than they realize. Technology is stripping away the layers brokers have long relied on, exposing inefficiencies that were previously hidden and giving employers tools they never had before. Today, they can:

• Analyze their own claims.

• Negotiate directly with providers.

• Build networks and benefits tailored to your workforce, not your carrier’s priorities.

That doesn’t mean every broker is obsolete. The ones who endure will be those who prove their value through expertise, not through controlling access to information. The rest will go the way of the travel agent.

The questions you need to ask

Start with disclosure. Demand every commission, bonus, override, and carrier payment. The law requires it. If your broker won’t provide it, fire them.

Then consider: what expertise are you paying for that you couldn’t access directly? What would change if costs went down instead of up? How much of your plan is shaped by your needs—and how much by the incentives your broker can’t or won’t reveal?

There’s a future for advisors who choose transparency over commissions and align with employers rather than insurance carriers. The healthcare middleman era isn’t ending tomorrow. But its decline has already begun. Employers are noticing something that has always been true: the system wasn’t made to serve them, and the choice of whether to accept it may soon be theirs.