Last week, the GetInsured team released “Health Check: Examining the Business Impact of Private Health Insurance Exchanges,” our third-annual study of the private exchange market. Unlike our 2013 study, which measured awareness, and our 2014 study, which measured adoption, this study measures a more mature market – one in which tangible business benefits from private exchanges are becoming visible – and is one of the first of its kind to do so.
The study examines the business value that insurers are beginning to realize through the implementation of private exchanges, including a significant reduction in administrative burden as well as increased market share. More than half of insurer respondents (52 percent) have seen a reduction in administrative costs, while 48 percent have increased their market share. Of those that plan to offer single insurer private exchanges, more than half (55 percent) expect that a reduction in administrative costs will be among the benefits, followed closely by increased revenue (45 percent) and increased market share (43 percent). These findings and the future outlook are particularly exciting as single-insurer private exchanges gain traction with consumers – from group settings to individual plans – keeping loyal consumers tied to particular insurance brands through the exchange model.
The study also uncovers some interesting paradoxes around ancillary offerings – most notably, that ancillary products are seen as key to a compelling consumer experience, yet exchanges are slow to adopt beyond only the most common products. Finally, the study touches on the role of brokers in the changing landscape, while highlighting the need for more education in employer settings around private exchanges’ ability to support multiple funding models, including defined benefit and defined contribution. Despite the complexity of these forces on industry projections, the data reveals one inescapable conclusion: private exchanges are well on their way to becoming the de facto model for employer-sponsored health insurance.
The health insurance market is undergoing transformative change, and we at GetInsured are excited to play a role in shaping the future of the industry.