Exchanges juice voluntary market

(Thinkstock image) (Thinkstock image)

Voluntary product strategists expect the rise of the public exchanges and the expansion of private exchanges to create big new sales opportunities.

When Eastbridge Consulting conducted a voluntary market player survey earlier this year, it found that 70 percent expect PPACA to help increase voluntary product sales.

One factor: Traditional health insurance brokers are thinking  a lot harder about diversification.

Sun Life Financial -- a company working its way into the voluntary market -- hosted an exchange launch webcast Tuesday.

Jonathan Gruber, one of the architects of the modern U.S. health exchange programs, flat out told brokers watching they might have to cope with falling major medical commissions by selling more advice – and by selling other, related products.

Another factor: The Patient Protection and Affordable Care Act encourages designers of Small Business Health Options Program exchange plans to set high deductibles and high annual out-of-pocket maximums.

Many exchange plans have an annual family cap of $12,000.

The SHOP market might attract just a small percentage of small employers. The new PPACA rules will have almost no direct effect on large, self-insured employers. But the large employers already are moving toward increasing deductibles. If and when the new PPACA Cadillac plan tax on high-value coverage kicks in, that could accelerate the trend.

Voluntary market players expect to see workers in the new, higher-deductible plans buy the same kinds of gap-filling products that holders of high-deductible, health savings account-compatible health coverage now buy.

In theory, the public exchanges could become big voluntary product players themselves. They can help users click through to separate pages that sell other insurance products.

Large benefits consulting firms and managers of Web-based insurance sales systems want to attract employers to new “private exchange programs,” or Web-based, multi-plan enrollment systems.

Traditional Web insurance supermarket sites also would like to get a piece of the voluntary action.

 

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