Is HackerCare real health insurance?

HackerCare is not health insurance. HackerCare is a membership based association that offers group insurance through a carrier named Starmark. If you want to purchase the Starmark group health insurance, you have to join HackerCare. No one should ever be forced to join a fee based membership organization in order to purchase health insurance.

HackerCare is a membership, not health insurance

In an effort to appeal to the young technology crowd that eschews government and corporate bureaucracy, HackerCare is offering a membership based program that offers discounts on different products, services and potentially help paying for a health insurance deductible. HackerCare is not health insurance. While HackerCare will help you enroll in a health insurance plan, their main mission is to sell memberships in their discount program.

Association membership gimmick

These discount membership associations that HackerCare is emulating have been around for decades. No individual, family or business should ever have to enroll in a fee based membership program just to obtain health insurance. The associations are usually just a way to generate leads for their participating businesses that are offering discounts and benefits that are often times of dubious value. The real winners are the owners of the associations that generate a monthly stream of revenue while providing little in terms of service for their members.

We are waiving the 50.00 a year HackerCare enrollment fee until your coverage starts, so there’s no risk to join. Pay only when your plan starts! – HackerCare email advertisement

Murky marketing and red flags

The group health insurance offered by Starmark which is a division of Trustmark Life Insurance Company. There are several red flags I saw in an email and in the marketing of the group health insurance.

1. The use of the term Aetna PPO when referring to the names of the health plans. Is the health plan really from Aetna, Starmark or a combination of both? Who will actually be paying the claims? Who will be issuing membership cards? Who is the group actually contracting with for health benefits? Where is the Evidence of Coverage? Where is the mandated Summary of Benefits that must meet specific federal guidelines for design and content? (See HackerCare Health Care 411)
2. The Deductible Co-op Benefits of the second column of the HackerCare Benefits Summary purports to cover 80% of the deductible which would make it similar to hospital indemnity insurance. The monthly co-op premium goes to cover this deductible benefit and someone is making money off a slick marketing ploy. Similar to forced membership purchases, no credible health plan will cross sell another program such as this indemnity insurance. If the health plan is so wonderful, just lower the deductible instead of making the members pay for an additional benefit.
3. The term co-op is problematic and I believe seriously misleading. HackerCare says the deductible co-op plan is voluntary and not insurance. If so, it shouldn’t be listed on the Summary of Benefits leading people to assume that it is either included or compulsory. There is nothing in the description of the co-op program to lead me to believe this is a real cooperative with members, elected Board members and By-Laws for the mutual benefit of the membership.
4. The group health plan enrollment form requires listing any pre-existing conditions of the employees. Pre-existing conditions are never a consideration of health insurance for individuals, families and small groups offered either through Covered California or off exchange. Large groups can use health information to ultimately determine the rates. The rates shown on the HackerCare website have triple asterisks to indicate the final premium amounts may be higher or lower. The rates will be determined by the overall health of the enrolling members once Aetna or Starmark make their final underwriting decisions. (See screen shot of pre-existing condition questions at end of post)
5. Who is the employer? The health plans offered through HackerCare are for groups, but they are being marketed to independent contractors. While there can be some exceptions, if you are not a W-2 employee you can’t enroll in an employer group health plan. Does this mean that all the hackers enrolling will be employees of HackerCare? I am sure they are following the arcane insurance rules, but they should give a detailed explanation of exactly how the group plan will work. Click on image to enlarge.

Membership mailing lists are pure gold

Unfortunately, many of these group membership associations are just a tool to be used by other companies. When someone enrolls in an AARP Medicare Supplement Plan, they are actually contracting with United Healthcare, not the American Association of Retired Persons. AARP gets a slice of the action from the insurance sales and the even more valuable resource of a membership list to be sold to other companies. Hey, it’s a good scam if you can create it.  (See The hidden costs of dental, vision and supplement plans)

Research alternatives, costs and benefits

The HackerCare association membership and group health insurance Might be fair and reasonable value. But you shouldn’t think your fellow hackers, any more than a fellow retired person, has your best interest at heart. Ask lots of questions and explore all the alternatives before offering an e-signature that mandates membership in some association or paying extra for a deductible co-op benefit that may be of little value compared to the monthly cost. Click on image of pre-existing questions to enlarge.