In our recent webinar, “Winning Combination for Insurer Growth: HDHPs + Private Exchanges” Stephen D. Neeleman, MD, Founder and Vice-Chair, HealthEquity, and Jonathan Rickert, CEO, Array Health, gave a comprehensive overview of how private exchanges combined with High Deductible Health Plans (HDHP)s and Health Savings Accounts (HSA)s can work hand-in-hand to provide the benefits that consumers need.
Dr. Neeleman kicked the webinar off with a discussion of the recent data from Kaiser Family Foundation’s 2015 Employer Health Benefits Survey on the growth of HDHPs and HSAs. He called HDHPs “the medicine” to combat unsustainable healthcare economics. He referenced the graph below which shows that premium increases have remained stable since 2005, but that the average worker’s earnings have decreased. Therein lies the need for innovative solutions, such as combination of HDHPs and HSAs. If the HDHP is the medicine, Neeleman – invoking Mary Poppins – called the HSA “the spoonful of sugar to make the medicine go down.”
He also noted the rapid increase in these types of HDHP/HRA or HSA-qualified HDHPs from four percent of covered workers in 2006 to 24 percent in 2015.
In addition to the data and trends discussed at the beginning of the webinar, three main topics were of particular interest to the webinar attendees, as evidenced by the types of questions that were asked and by the way attendees voted during the poll questions.
First, there appears to be a natural synergy between private exchanges and high deductible health plans (HDHPs) paired with health savings accounts (HSAs). According to the data of those members on private exchange platforms, 30 – 50 percent are picking a high deductible plan (HDHP). Those who purchase a HDHP through a private exchange are highly likely to also purchase at least one voluntary insurance product. On the Array Health platform, 69 percent of exchange participants buy voluntary insurance products, which allows them to right-size coverage to their specific needs, including covering the risk associated with HDHPs.
Second, many small groups are either in the process of disaggregating into individual retail contracts or are under threat of disaggregation. The reasons for this trend are many, but Rickert laid out three main causes for this trend:
- Health insurance is too costly for small employers.
- Public exchanges, now in their third year, are a good choice for many subsidy-eligible workers.
- A precedent already exists in the retiree market where group retiree members are transitioning to individual plans.
By answering a poll during the webinar, two-thirds of webinar respondents said that they thought small groups (under 50 employees) are likely to disaggregate.
Third, there is a lot of interest in finding ways to retain group members as they transition to individual plans. Rickert and Neeleman sketched out a group facilitated individual insurance concept whereby group employees could buy individual health plans and voluntary products from an insurer’s private exchange. The solution would allow subsidy-eligible group employees to buy subsidized individual qualified health plans (sold through public marketplaces, whether federal or state-based) through an after-tax payroll deduction. And non-subsidy-eligible group employees could buy individual health plans on a private exchange through an after-tax payroll deduction. The insurer would bill each employer group for all individual employee plans on a single consolidated bill (“list bill.”) The majority of webinar respondents said they would be interested in this type of group facilitated individual insurance solution.