The story of MotivHealth began almost 20 years ago when two friends were having a conversation about the rising cost of health insurance premiums (yes, even back then insurance premiums were rising at unsustainable rates). The conversation went something like this:
If you gave someone a credit card and told them go to the store and buy everything they needed and it would only cost $25, they would probably buy a few things they didn’t actually need and they wouldn’t even know or care about the cost of what they bought. But if you gave them a credit card with $1,200 on it and told them to go buy everything they needed, but whatever they didn’t spend, they could keep, they would probably come back with only the things they needed and they would have cared about the cost of what they bought.
It goes back to Milton Friedman’s quote, “nobody spends somebody else’s money as wisely as he spends his own.”
Then the conversation turned to life insurance. The question was asked about the two tallest building in Boston and what those companies sold. For those who have been to Boston, you know that the two tallest buildings are the John Hancock building and the Prudential Tower, both of which sell life insurance.
If you are considering buying life insurance, most financial planners will tell you that you are better off buying a “Term” policy and taking the premium savings to invest yourself. That way you are covered for a catastrophic event, but you are able take the money that would have gone to the life insurance company and manage it yourself, leaving you with more money over time.
That led to the conversation about why health insurance isn’t viewed they same way. If everyone had money in an account (an HSA) that came from the money they saved in insurance premiums while still being protected against a catastrophic event or multiple smaller medical expenses, they would start to care about how much things cost and make better decisions when it came to their health. But just as important, they could start building up savings that would not only pay for current medical expenses; the unused money would roll over year over year and actually provide a plan to pay for healthcare through retirement.
Interesting fact: approximately 70% of people spend less than $700 a year on medical expenses.
For those who have large medical expenses, they are still covered by insurance and end up paying about the same as they would in any other plan.
This conversation led to starting a health insurance company that focuses on offering HSA-based plans with the goal of enabling consumerism in healthcare. This would lead to lower claims costs resulting in lower premiums that ultimately puts more money back into the pockets of everyday employees.
We’re excited to say that we have been doing this successfully for hundreds of companies since January 2016.
Welcome to MotivHealth!