Posted on Thursday, May 21, 2015 by Natalie McLinden
With change comes challenge, and there sure has been a lot of change in the insurance industry the past year. With acquisitions and buy outs, ACA chaos and more and more conversations around private healthcare exchanges, there’s a lot of buzz in the industry and the landscape is definitely changing. What’s interesting, however, is that private heath exchanges have been around for years—in fact, Businessolver has been providing exchange technology to pooled insurance groups since 2002! But why are exchanges just now starting to pick up steam?
Early adopters are seeing success. It’s always nerve racking being the first one to step into unknown waters, but sometimes risks bring great rewards. Several large employers, including Sears, Petco, and Walgreens, have already signed up with leading exchange operators and are seeing great success–and people are noticing.
Employers are getting educated. With all of the exchange hype in the market, employers are beginning to seek out and receive more education to understand how private insurance exchanges work, the value they can bring to the company and to employees, and the implications of switching to a defined-contribution plan.
Technology is easing the switch. Switching from traditional employer-provided plans to an exchange model can be scary for both employers and employees alike. While some employees have been begging to have more choices, others are overwhelmed and suffering from choice paralysis. Fortunately, advancements in recommendation engines and decision support tools are helping making the transition easier– employers are at ease knowing their employees are receiving assistance when enrolling, while employees feel educated and more confident with their choices. It’s a win-win on both sides.
Controlling costs. Exchanges have the opportunity to reduce costs in a multitude of areas. Employers using a defined contribution model may find that employees tend to buy-down to lower cost health plans. Also, since the premium billing and enrollment happen within the private exchange, there tends to be less of an administrative burden for employers.
Bottom line, change is coming
and private insurance exchanges won’t be disappearing any time soon. If you’re interested in learning more about exchanges, we encourage you to download our eBook,”Private Health Insurance Exchanges: Change is Coming
“, which will cover how today’s more competitive approaches toward private exchanges differ from traditional heath insurance technology platforms and what you can do to stay ahead of the changing market.