Private Healthcare Exchanges and Defined-Contribution Plans: A Hail Mary Solution for Healthcare?
Report Summary
Private Healthcare Exchanges and Defined-Contribution Plans: A Hail Mary Solution for Healthcare?
Healthcare providers seeking to capitalize on the changing face of employer healthcare contributions and consumer plan selections are eager to establish private healthcare exchanges.
Boston, September 11, 2012 – A new report from Aite Group explains the inner workings of private healthcare exchanges and defined-contribution plans. The report details the qualities that consumers and employers seek in a healthcare exchange, describes the value of private exchanges for employers and employees, and presents a use case of employer savings for those transitioning to private exchanges and defined-contribution plans. It also assesses the viability of the two models.
Following the 2010 passage of the Patient Protection and Affordability Care Act, which emphasized the development of state-based exchanges to offer healthcare options to the uninsured, self-employed, and small-employer populations, health plans seek to develop private exchanges that offer a variety of health plan choices for existing or prospective clients. At the same time, the trend in employer-provided health benefits is transitioning toward a defined-contribution model in which employers pay a fixed amount toward an employee’s healthcare premium. Consumers are becoming increasingly responsible for their health insurance, and the defined-contribution model is increasingly coupled with the private exchange to cater to plans being sold on these exchanges.
“The market for private exchanges and defined contribution is growing steadily as employers seek to cap healthcare expenses and employees pursue more healthcare choices and affordable rates,” says Kunal Pandya, senior analyst with Aite Group and author of this report. “With public exchanges coming into play in 2014, health plans want to maintain their value proposition for group-based business and dissuade employers from seeking healthcare through public exchanges."
Healthcare exchange providers mentioned in this report are ADP, AON Hewitt, Array Health, BCBS Michigan, Bloom Health, Choice Administrators, ConnectedHealth, Connextions, eHealthInsurance, Evolution1, Extend Health (Towers Watson), hCentive, Health Connector, HealthPass, Highmark, MABX (Ensurex), OptumHealth, and WellPoint.
This 22-page Impact Report contains six figures and one table. Clients of Aite Group’s Health Insurance service can download the report.