It is estimated there are more than 100 private exchanges in existence, with each one promoting unique or distinguishing characteristics in a crowded marketplace. Given the enormity of services offered to employers of many shapes and sizes, there are bound to be some conflicting claims that require an asterisk to eliminate any confusion for prospective customers.
For example, Aon Hewitt’s Corporate Health Exchange markets itself as the only fully insured, multi-carrier private exchange for large national employers, as well as the first operational HIX of its kind for active employees.
It’s a very specific and seemingly safe description, but others aren’t so clear cut.
eHealthInsurance.com describes itself as “America’s first and largest private health insurance exchange where individuals, families and small businesses can compare health insurance products from leading insurers side by side and purchase and enroll in coverage online.” eHealthInsurance.com offers thousands of customers health plans underwritten by more than 180 of the nation’s leading health insurers.
But a former executive with the company who was part of eHealthInsurance’s initial leadership team disputes those claims. Bryce Williams, founder and CEO of HIX operator Extend Health as well as well as managing director of parent company Towers Watson’s Exchange Solutions, describes his former employer as “the oldest, largest website for health plans.” He also says it’s inaccurate to use the word exchange, adding: “They don’t offer services large employers would use.”
The bottom line, according to Williams, is that Extend Health is the oldest private exchange, founded in 2004 as “an evolved web-based approach.”
While it’s not unusual for one competitor to challenge another’s marketing claims, one of the industry’s leading researchers is also pondering the question of “when a website suddenly became an exchange.”
Paul Fronstin, director of the Employee Benefit Research Institute’s Health Research and Education Program, recently made that observation about eHealthInsurance.com. He also explained that the website differs from other private HIX operators in that “there is no guaranteed issue. Sellers didn’t have to sell to buyers. You could be turned down.”
He believes the term “exchange” is being used too loosely. “It can be argued that the group-based exchanges are really the vision of what a cafeteria plan was supposed to look like,” Fronstin observes. “When I think of an exchange, I think of the public exchanges, where not only is a marketplace created to match buyers and sellers, but insurance market reforms added guaranteed issue and an individual mandate. The private exchanges appear to be mimicking that, and when it comes to websites, they appear to be mimicking Amazon.com.”
eHealth, Inc. has enrolled more than 3 million Americans since pioneering private HIX technology 15 years ago, according to company spokesman Brian Mast. He explains that “eHealth was the first to build an exchange before the term ‘exchange’ became popular,” adding that the Affordable Care Act defines such an entity as “a health insurance marketplace designed to serve individuals, families and small businesses.”
But Williams says there’s another issue to consider: A true HIX must temper technology with a human touch. “You are really working with employers to ensure that employees get full service and support – electronic and human,” he says.
