PRIVATE Exchanges Are Where The Action Is!

[AllenChicago]

While we're watching and waiting to find out which PUBLIC Exchanges/Marketplaces major players like UHC, AETNA, Humana, et al., will participate in, it seems that they're already going full-steam into the PRIVATE Exchanges.

April 15, 2013
The large employee benefit consultancy Mercer said this morning that 10 major insurance carriers including Aetna (AET), Cigna (CI), Humana (HUM), UnitedHealth Group (UNH) and a host of Blue Cross and Blue Shield plans have signed on to the firm's "private exchange for 2014 enrollment."

Story: Insurers Flock to Private Exchanges While States Grapple With Obamacare Marketplace - Forbes

If there are less headaches, paperwork, government fees and red-tape associated with Private Exchanges, it's no wonder that most carriers are hesitant to participate in their Government-Controlled Public counterparts.
-ac

 

[Ann H]

The word "Exchange" and "Marketplace" will be overused and therefore twisted from its original intention.

Large businesses are using these benefit consulting firms (like Mercer) for the idea of a multiple-option group health plan with multiple carriers, where employees can take their employer's defined contribution and then pick their own plan from that private exchange.

Carriers are establishing the same idea for small businesses who can't access large consulting firms like Mercer. But the small group plans will be required to use just one carrier. So, like UHC & BCBSAZ have announced, they are allowing small groups to pick multiple plan designs (but with just one carrier), and give each employee the defined contribution from which to shop.

E-Health has recently been telling the govt they can be a private exchange that is a lot cheaper than these state & FFE exchanges.

And, of course agents all over the country are calling their websites and professional services for quoting and taking apps "exchanges" and "marketplaces".

So, a few billion dollars later, we are at about the same place we were before. People can shop on a public exchange/marketplace or a private one, and lots of people don't know the difference.

Now that the govt has chosen the word "marketplace", it's pretty likely they can't tell you to cease & desist using that word, since it's such a generic term for a place to shop.

 

[kahlestyle]

Private exchanges = No subsidy eligible

Public exchanges = Subsidy eligible

Game over for < 400% ?

 

[Ann H]

Private exchanges = No subsidy eligible

Public exchanges = Subsidy eligible

Correct.

Game over for < 400% ?

No, because private exchanges like Mercer's (mentioned in the original post) also include an employer contribution.

 

[ABC]

I agree, the subsidies are going to pick up most of the people.

The private exchange market may not work. These plans will have to be cheaper than what a group can purchase outside the exchange. I have a feeling these are going to have a PEO/Association approach.

 

[AllenChicago]

Yet another Private Exchange attracts the major insurers:

April 29, 2013 9:05 AM EDT



NEW YORK---- Towers Watson (NYSE, NASDAQ: TW), a global professional services company, announced the first group of health insurers to agree to offer health plans on Towers Watson's new private exchange for active employees:

• Aetna
• Anthem Blue Cross
• Anthem Blue Cross and Blue Shield
• Blue Cross and Blue Shield of Georgia
• Empire Blue Cross Blue Shield
• Kaiser Permanente
• UnitedHealthcare

Source: StreetInsider.com - Leading Health Insurers to Provide Health Plans on New Towers Watson Private Exchange for Active Employees

-ac

 

[ABC]

I think we are going to see the carriers limit their distribution models.

 

[timsip]

Correct me if I am wrong, but aren't the Mercers et al going to be where the large groups will be shopping and not the small group and individual customers?

 

[Ann H]

Correct me if I am wrong, but aren't the Mercers et al going to be where the large groups will be shopping and not the small group and individual customers?

Yes, this is for large group, usually very large group. I could see it creeping into small group, though. In effect, these places are brokerage houses, and I could see them encroaching on our market in a few years.

 

[ABC]

Correct me if I am wrong, but aren't the Mercers et al going to be where the large groups will be shopping and not the small group and individual customers?

Yes, but if they are offering the most effectively priced plans then it will be tough to write 50+ size cases. The independent may not have access which will put us at a disadvantage.

It will also be a disadvantage for the clients. The customer service a 55 life group will receive from a large broker house will be non existent. Most of the large broker houses will not even touch anything under 100 lives.