Medical Expense Relief That Changes Lives (with Brett Morris) | Episode 125

This video provides an in-depth exploration of the Samaritan Fund Program and Foundation, a unique solution developed by Brett Morris to address the financial devastation caused by high-cost medical diagnoses and claims for employees and self-funded employers. The core mission of the program is to alleviate financial anxiety—which the speaker notes has a physical effect on the body—allowing individuals to focus on healing. The discussion establishes the context of the current healthcare crisis, where high deductibles and out-of-pocket maximums, often coupled with expensive prescription drugs, lead to medical debt and bankruptcy for insured Americans. The Samaritan Fund acts as a compliant bridge connecting philanthropic foundations (Samaritans) with employees in need, thereby mitigating catastrophic financial risk for the employer's self-funded plan.

The mechanism relies heavily on strict compliance to avoid legal pitfalls like discrimination or rebating. The key structural element is that funding provided to the employee must come from independent third-party Samaritan sponsors, not directly from the employer, to avoid incentivizing the employee to leave the group plan. The employer's role is limited to advertising the program to all employees, ensuring universal access, though not all may qualify. Once an employee applies privately, the Samaritan Fund Foundation works to secure funding—often through a debit card system to cut through the red tape of traditional grant applications—to cover the individual’s cost-share (deductibles, out-of-pocket maximums) or find alternative coverage if the employer’s plan has carved out necessary high-cost drugs. This arrangement creates a win-win: the employee receives zero out-of-pocket costs, and the employer's plan saves potentially millions by removing a high-cost claim, often resulting in lower stop-loss premiums or enabling the company to remain self-funded.

The conversation also delves into the broader issues plaguing the U.S. healthcare system, particularly the lack of price transparency and the arbitrary nature of network pricing. Morris argues that the current system is broken because hospitals and providers are commoditized by networks, which steer patients based on negotiated contracts rather than price or quality competition. He advocates for a fundamental shift where providers are forced to advertise transparent, consistent pricing for services (like an MRI or hip replacement), regardless of who is paying, which would dismantle the current network structure and introduce genuine market competition based on value. This perspective highlights the systemic failures that necessitate programs like the Samaritan Fund to address the resulting financial burdens on consumers.

The program operates on an annual contract basis, with renewals assessed two months prior to ensure continuity of care or a smooth transition back to the group plan if the medical condition has resolved. The timing is crucial; the program aims to finalize solutions in October, prior to open enrollment, so participants can confidently waive group coverage, allowing the employer to leverage the removal of the high claim for favorable renewal negotiations. The complexity and expense of establishing the compliant funding structure—including securing legal opinions from top law firms and receiving Department of Labor blessings—is cited as the primary reason why similar solutions are not widespread, underscoring the unique value proposition of the Samaritan Fund.

Detailed Key Takeaways

• Compliance is Paramount for High-Cost Claim Mitigation: The Samaritan Fund's success hinges on ensuring that the funding provided to the employee comes exclusively from independent third-party philanthropic sources (Samaritans), not the employer. This structure prevents the arrangement from being classified as illegal discrimination or rebating under ERISA, which prohibits employers from incentivizing employees to leave their group health plan.
• Addressing the Anxiety of Medical Debt: The program’s mission is centered on providing "peace of mind to heal." The speakers stress that financial anxiety often outweighs concern over the disease itself, and removing the financial burden (deductibles, co-pays, out-of-pocket maximums) allows the individual to focus entirely on their health and recovery.
• High-Cost Prescription Drugs Drive Bankruptcy: The video highlights that high-cost prescription drugs are a major cause of personal bankruptcy and medical debt in the U.S. Even individuals with "rich" health plans (e.g., $250 out-of-pocket maximum) can be crippled if the plan carves out a necessary, expensive medication, leaving them with no viable coverage.
• The Bridge Between Philanthropy and Employee Benefits: The Samaritan Fund acts as a crucial intermediary, connecting foundations and charities that want to help specific populations (e.g., kids with cystic fibrosis) with the employees who need assistance, solving the foundations' problem of efficiently finding and administering funds to qualified recipients.
• Strategic Timing for Open Enrollment: For self-funded employers, the program must roll out in September and finalize solutions in October, before open enrollment. This allows the participant to confidently waive group coverage and enables the employer to present a cleaner claims history (without the high-cost claim) to stop-loss carriers for better renewal rates or to facilitate a transition from fully insured to self-funded status.
• Employer Role is Limited to Promotion: To maintain compliance, the employer's primary role is simply to advertise the program to all employees, ensuring equal opportunity to apply. The employee then engages with the Samaritan Fund privately, signing their own HIPAA forms, thus protecting the employee's privacy and the employer's legal standing.
• Employee Giving Campaigns: The foundation encourages current employees who are not in need to "be a Samaritan" by contributing small, tax-free donations (e.g., $5 per paycheck) through payroll deduction slots, fostering a culture of mutual support within the company.
• Stop-Loss Carriers Benefit from Risk Mitigation: Stop-loss carriers view the Samaritan Fund as a risk mitigation strategy. By successfully moving a high-cost claimant off the group plan, the carrier avoids millions in reimbursement, often resulting in lower base rates or the elimination of specific claimant lasers for the employer.
• The Need for Price Transparency: A major systemic fix proposed is mandatory price transparency, forcing providers to charge the same price to everyone regardless of the payer. This would dismantle the current network model, which currently acts as a commodity seller, and introduce true competition based on cost and quality.
• Addressing Smaller Needs Through the Foundation: The Samaritan Fund Foundation's reach extends beyond the high-cost claims program. It can assist individuals with smaller, but still crippling, financial needs, such as sourcing a few thousand dollars for insulin for someone hitting a high deductible, even if they don't qualify for the full program.

Key Concepts

• Samaritan Fund Program: A compliant mechanism that provides third-party philanthropic funding to employees facing high-cost medical claims, enabling them to transition off the employer's self-funded plan, thereby mitigating the employer's risk and cost.
• Samaritan Fund Foundation (501c3): The non-profit entity used to source, manage, and administer funds (often via a debit card system) from various donors and other foundations, ensuring the compliant separation of funds from the employer.
• Reference-Based Pricing (RBP): An alternative payment methodology mentioned as a market-driven attempt to force transparency by basing provider payments on a multiple of Medicare costs, exposing the arbitrary nature of network pricing.
• Rebating/Discrimination: Legal pitfalls under ERISA that the program is designed to avoid. An employer cannot directly or indirectly pay an employee to leave the group plan due to their high claims history.

Examples/Case Studies

• High-Cost Drug Carve-Out: A woman with a "super rich" health plan (100% employer-paid premium, $250 annual out-of-pocket maximum) could not afford her necessary medication because the employer had carved the specific high-cost drug out of the summary of benefits. She was ineligible for patient assistance programs due to her low deductible, but the Samaritan Fund helped her find alternative coverage for the drug.
• Insulin Affordability: A participant who was rationing his insulin because he couldn't afford his $6,000 deductible was helped by the Samaritan Fund Foundation, which sourced a couple of thousand dollars to cover his cost-share, even though his case was not severe enough for the full program.
• Hospital GoFundMe: The speaker recounts the irony of a hospital helping his mother set up a GoFundMe campaign to pay the bill for her double lung transplant, illustrating how deeply embedded the expectation of consumer fundraising is within the high-cost healthcare system.