The fate of public exchanges under health reform is still up in the air as states struggle with implementation, but private exchanges are gaining momentum among insurers and employers alike.
Health consulting firm Mercer said that 10 major insurance carriers — including Aetna, Cigna, Humana, UnitedHealthcare and a number of Blue Cross and Blue Shield plans — have signed on to the firm’s private exchange for 2014 enrollment.
The consulting firm in January announced the launch of Mercer Marketplace, a private benefits exchange designed to help employers and employees by offering them a one-stop-shop for their benefits from multiple insurance providers.
“With 56 percent of employers considering a private exchange to provide benefits to their active employees or retirees, the transformation of the U.S. health care landscape is well under way,” David Rahill, president of health and benefits at Mercer, said in a statement.
Private exchanges work similarly to the public exchanges set up by the Patient Protection and Affordable Care Act (PPACA) in that consumers will be able to compare and choose their own health plan. For the most part, employers give workers a set amount of money to spend on health insurance and other ancillary benefits in a private exchange.
The hope is that exchanges will increase competition between health insurance plans, thus leading to better prices for consumers.
Mercer’s exchange will be available to employers with at least 100 employees. Options under the Mercer exchange include a wide array of core medical and voluntary benefits, constituting more than 20 lines of coverage.
Mercer executives cited employee benefit transition as their reason to open up the exchange. Mercer President and CEO Julio Portalatin said earlier this year that “a number of critical factors” — including the unsustainable rise in benefit costs, health care reform, consumer-driven solutions and improving technology — is changing the way benefits will be delivered to consumers.
Mercer and other corporations are getting into the exchange game to be a part of the new phenomena.
In many circles, private exchanges have been more popular than their public counterparts. While states still grapple with how to deal with their public exchanges, private exchanges have been getting good feedback, industry insiders say.
Consulting firm Aon Hewitt, which launched its corporate exchange last fall, said last month that more than 100,000 U.S. employees successfully enrolled in health benefits through its exchange during the 2013 annual enrollment period last fall.
The firm claims that the exchange empowers employees to become more "astute health care consumers."
According to Aon Hewitt’s post-enrollment analysis, almost 80 percent of enrollees felt confident they chose the health plan that offered the best value for them and their family, and almost all (93 percent) liked being able to choose among multiple carriers.
“When given more options, employees become empowered to make individual choices based on value, provider network, price and health status,” said Ken Sperling, Aon Hewitt's national health exchange strategy leader. “Employees like having control over such an important decision and appreciate not being limited to a pre-determined plan and insurance company.”
Darden Restaurants is among the employers using Aon Hewitt's exchange.
"This year, we were able to offer a broader array of health care choices than we have in the past, giving our employees the flexibility to choose the level of coverage that best meets their needs at a price they could afford,” Danielle Kirgan, senior vice president of total rewards and shared services at Darden Restaurants, said in an Aon Hewitt statement.
Meanwhile, the government is beginning to market the public exchanges to consumers. In January, The Department of Health and Human Services relaunched healthcare.gov, a website aimed at informing consumers about the health reform law while giving them a place to purchase insurance.
But the marketing effort hasn't been easy — the exchanges have gotten pushback from some Republican governors, some who refused to set up a state exchange. Others complained there hasn’t been enough guidance from the government on how to do so. Though the government intended for each state to implement their own exchange, the federal government is taking on that role in half the states.
There’s also the huge hurdle of uninformed consumers who are unaware of what the exchanges do and what health reform means for them.
According to a recent survey by InsuranceQuotes.com, for example, 90 percent of Americans don’t know when the new health insurance exchanges will open.
Open enrollment starts Oct. 1, with coverage beginning Jan. 1, 2014.
Beginning Jan. 1, when coverage takes effect in the exchanges, virtually everyone in the country will be required by law to have health insurance or face a tax.
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