Single- vs. multi-carrier private exchange debate still hot

Brokers appear to be OK with a single-carrier exchange, for now.

After Cigna launched its own exchange last week, EBA reported that while many in the industry feel a single-carrier exchange can still provide the variety employers are looking for, others feel the definition of a marketplace has been muddied by the concept.

David Guilmette, president of Cigna’s Global Employer Segment, weighed in with his view of the discussion: “It should be clear from what Cigna’s done to-date is that we believe both models have a purpose. We’re participating on third-party exchanges … and we want to participate with our own proprietary exchange.” He says that smaller employers tend to have less administrative solutions that can handle a multi-carrier option, which is why the company’s exchange is geared toward the 250 to 1,000 employee-size company. He thinks they still offer a “range of benefit choices with one brand.”

Over in EBA’s LinkedIn group, several benefit advisers say they’re curious about how the private exchange platform will evolve and that regardless of competition among brands, “the behavioral data and survey date are aligned; individuals — even those with group-sponsored plans — want more choice and more control over their health care spend,” says Ernie Harris, vice president of strategy and product management at Alegeus Technologies.

But Aaron Davis, president of NextLogical Benefit Strategies, echoed a sentiment previously reported last week: “An exchange offering only the products of one carrier fails to meet the basic definition. It's nothing more than a defined contribution scheme. The key to success in any exchange is competition between carriers to deliver the most cost-efficient and highest value health plan offerings (including health risk management, wellness, administration, provider networks, etc.)”

“This new paradigm will continue to evolve,” adds Douglas Elkins, an employee benefits fellow, to the discussion.

That’s exactly what Cigna thinks, too. “There’s an opportunity in the market for both, and I don’t know that one will prevail over the other,” Guilmette says. “We’ve got to remember that we’re in the very, very early stages of exchanges, this market almost didn’t exist even a year ago. My guess is that what we’re looking at five years from now will be completely different.”