Private exchange adoption is on the rise, and shows little sign of slowing down. Two new reports – one from Accenture and another from Deloitte – offer projections through 2018 that indicate private exchanges are becoming the de facto model for employer-sponsored health insurance.
Accenture’s newly published report estimates that 6 million members enrolled in their benefits on a private exchange for the 2015 plan year, continuing a remarkable adoption trend in excess of 100 percent annual growth since 2013. Moreover, Accenture projects significant growth through 2018, when enrollment is expected to reach 40 million.
There are several factors contributing to this anticipated growth, but two in particular stand out. First, a couple of issues limiting private exchange growth will dissolve in the near term: capacity constraints by a lack of mature solution providers and adoption delays among large employers.
Secondly, and perhaps more importantly, consumers’ demand for choice and flexibility across all areas of their life, including now, new demand for retail-like shopping environments for healthcare and insurance, is spurring employers to overcome their inhibitions and offer these tools. Proven e-commerce principles can be applied to private exchanges, giving consumers more choices. Accenture predicts that these consumer expectations will be a key driver in the hyper-growth of employer adoption of private exchanges through 2018.
The Deloitte report is similarly bullish, predicting that private exchanges could grow from 2.5 million covered lives in 2014 to 25-40 million covered lives in 2018, corroborating the Accenture projection. In addition to echoing many of the macro trends outlined in the Accenture report that are contributing to growth and adoption, this report also points to potential future value drivers of private exchanges. Among them is the ability of private exchanges to offer a broad product portfolio, which will become increasingly important as sales of ancillary products continue to rise – and private exchanges eventually become the one-stop solution for end-to-end benefits services.
The data are clear: private exchanges will continue to close the gap between consumers and health insurers by helping consumers access and manage everything that relates to their benefits – and in doing so, help them live healthier and more informed lives.
