How Caribou Helped This Business Owner Save Money on Health Insurance Without Losing Coverage

Christine Simone
February 7, 2024

The cost of medical care and health insurance premiums continues to be one of Americans’ top financial concerns, and the rising cost of healthcare is showing no signs of slowing down. In fact, healthcare costs are far outpacing inflation and, according to some experts, prices may continue to rise for some time. 

Dealing with exorbitant healthcare and health insurance costs is even more urgent for self-employed individuals and small business owners. Most full-time small business owners can’t rely on the benefits of a group plan to keep premium costs affordable. Instead, they have to factor the cost of private health insurance into their monthly expenses. In 2020, the average national cost of private health insurance for families was $1,152 per month.

What Rising Health Insurance Costs Mean for Financial Advisors Serving Small Business Owners

The Affordable Care Act made purchasing private health insurance slightly easier on entrepreneurs because they no longer have to worry about being denied coverage based on pre-existing conditions. The cost of those health insurance premiums, however, has only increased.

Business owners who have to purchase private health insurance face enormous financial obstacles that could impact their ability to cover monthly expenses, save for retirement, and even successfully continue to run their businesses. 

Therefore, financial advisors must be prepared to help their small business owner clients factor in the cost of health insurance into their overall financial plans and, in some cases, find ways to keep those costs affordable.

Below, we’re sharing a success story of how the team of healthcare and insurance experts at Caribou helped one business owner save over $9,000 per year without sacrificing coverage – even with a sizeable number of dependents on his plan! Keep reading to find out how we helped him make the switch to the same plan he was using, but for a much more affordable price.

Meet Tim

Tim owns a small business in Tennessee that he’s been running successfully for over a decade. As a small business owner, he’s responsible for his own benefits and doesn’t have enough employees to qualify for group coverage rates. 

In addition to needing coverage for himself, Tim and his wife Nancy also have several children, so they were looking for a plan that would protect them if anyone in their family got sick or experienced a health emergency.

Tim was originally looking to purchase a Preferred Provider Organization (PPO) plan due to the flexibility his family would have in choosing healthcare providers. When he first decided to make the switch to being fully self-employed, he was referred to a private health insurance agent by one of his colleagues. 

Tim’s Health Insurance Plan Before Caribou

The insurance agent Tim worked with sold him a plan that was marketed as a PPO but was in fact an Exclusive Provider Organization (EPO). An EPO is somewhat of a cross between a PPO and a Health Maintenance Organization (HMO) plan. Like an HMO, EPO plans restrict members to a network of providers (but the networks are usually a bit larger).

Tim thought he had a PPO because his insurance card had a PPO symbol on it, but it turns out that the state of Tennessee doesn’t even offer PPO plans on the Marketplace. The PPO symbol on his card actually referred to how the providers get paid, not to the benefits he was eligible to receive. (This is just another fun example of why health insurance can be frustrating to just about everyone.)

Unbeknownst to Tim, he was paying $2,500 a month (yes, that is $30,000 a year!) for a health insurance plan that wasn’t even providing him the benefits he thought he had signed up for. This amount is also just the fixed premium, meaning that it does not include expenses that the family will pay until they hit their high deductible or out-of-pocket maximum, which they had opted for to keep their insurance costs as low as possible. 

Additionally, Tim and his family had unknowingly been seeing healthcare providers outside of their network because they thought they had a PPO.

How Caribou Helped Tim Save Over $9,000 on the Same Health Insurance Plan

Frustrated and confused, Tim asked his financial advisor, Adam, for help. Adam was surprised to learn that Tim was paying so much for a high-deductible health insurance plan that wasn’t a PPO. This served as a perfect opportunity to utilize his firm’s partnership with Caribou to find a solution for his client.

Using our proprietary software, Tim entered data about his family, including his family’s current health status and medications to determine the right level of coverage for them, as well as their risk tolerance and other relevant financial factors. The software then analyzed Tim’s data to determine the family’s overall expected healthcare costs to find health insurance plans that were optimal for their specific situation and needs.

Lo and behold, our system helped Adam and Tim discover that Tim was significantly overpaying for his plan. We were able to find the exact same plan in the public Marketplace for only $1,700 a month ($20,400 a year). Tim was able to stay in the same network of providers he had currently and was now saving $9,600 a year in health insurance premiums. Tim and his wife were ecstatic, to say the least.

How Caribou Can Help Your Clients Save Money on Health Insurance

At Caribou, we pride ourselves on simplifying the health insurance planning process for financial advisors and their clients. Although Tim was able to save a lot of money while staying on the same plan, not everyone’s situation is that easy. 

In the case that your clients need more explanation about their options and plan types, Caribou also has a team of trusted, noncommissioned Health Advisors who are available for debriefing conversations. Our Health Advisors ensure that your clients fully understand the coverage they’re purchasing and answer all their questions regarding their health insurance plans.

And because our Health Advisors are noncommissioned, your clients can rest assured that there’s no incentive behind any information provided to clients. In Tim’s case, this might have been one reason he was sold a plan he didn’t fully understand before it was brought to Adam’s attention.

Financial advisors who offer healthcare planning in their suite of services provide immense value to their clients. And because healthcare costs are among your clients’ top financial concerns, it stands to reason that healthcare planning should be a part of your comprehensive financial planning framework. 

The good news is, you don’t have to become a healthcare expert to provide this level of value to your clients. To learn more about a partnership with Caribou, click here to schedule a conversation today.

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