Although private health insurance exchanges have been around for years, and open enrollment is becoming increasingly technology-driven, a new analysis from PricewaterhouseCoopers estimates even more employers will move active employees to private exchanges in part because brokers are taking on a bigger role in pushing them as a solution to rising health care costs.
Just like private exchanges, health care costs have been on a steady climb for years. And while private exchanges have not been very prevalent in the large group market, that is changing because brokers and consultants are seizing the business potential private exchanges present, says Barbara Gniewek, principal and private exchange lead with PwC in New York City.
Many agents and brokers own their own private exchange or partner with one. While Gniewek says not all consultants and brokers have a private exchange, it is very interesting and all are positioning themselves to have some skin in the game. For example, some brokers, she says, are treating private exchanges as a defensive play, while others are reacting more offensively to the changing employer-sponsored health care market. They want to make sure if their [employer] client is interested, they have an offering, Gniewek says. [Yet,] they are struggling to figure out how they fit into the exchange market [and] what is their role after the client goes to the exchange.
For employers looking to shift more responsibility for health care decisions to their employees, private exchanges are an attractive option, the PwC analysis says. Additionally, the consulting firm estimates that for the more than 5.6 million small- and mid-sized American companies, private exchanges may offer more affordable insurance to workers than what the employer could obtain on their own.
On the whole, I think private exchanges are going to be the best in the middle tier those companies typically dont have a lot of bargaining power in the market, says Ezekiel Emanuel, a professor of medical ethics and health policy, at the University of Pennsylvania, in the report.
However, the true savings, if any, of private exchanges remains to be seen. At Employee Benefit News Private Healthcare Exchanges conference in Chicago in July, an employer panel was pressed to describe any cost savings, and all said it was too early to tell.
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Time will tell [on cost savings], Gniewek says. The ability to save money comes from a lot of different things: People buying different coverage, right-sizing benefits improved discounts, improved consumerism.
The PwC analysis predicts an increased retailization of health care coverage, and says that in the not-so-distant future, insurers and exchanges may include subscription services that provide easy access to primary care and electronic health information for a small annual fee.
When you buy a health plan today, in effect youre buying the actual insurance; youre buying a plan design and networks. In the future, those things will be disaggregated, says Abir Sen, CEO of health care marketplace Gravie, in the report.
