Exchanges to generate $205B, but not without challenges
Insurers can significantly benefit from selling plans through health insurance exchanges, which will insure about 29 million people and generate $205 billion in premiums by 2021. But first they have to address several challenges arising from covering this newly insured population, according to a new report from the PwC Health Research Institute.
Next year alone, about 12 million people will receive coverage from exchanges, paying $55 billion in premiums. The problem, however, is that these newly insured members will have very different demographic profiles and health needs than the currently insured population, reported the Associated Press.
That's because health plans sold through exchanges will be available to people who currently earn too much money to receive Medicaid but not enough to afford private coverage, Reuters reported. For example, the newly insured population will have a median age of 33, more than 85 percent won't have a college degree and about 30 percent speak English as a second language. Their median income will be about 166 percent of the federal poverty level, or just over $38,000 for a family of four.
"Serving a less educated, ethnically-diverse population that is more likely to cycle on and off government support will require creative outreach programs, more targeted products and stronger ongoing customer support," Ceci Connolly, managing director of PwC's HRI, said in a statement.
But despite the difficulties facing insurers in covering these new members, including better understanding their needs and clearly communicating with them, the exchanges still present a "major business opportunity" she said.
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