Large employers bearish on private health insurance exchanges
After attracting big-name employers such as Sears and Walgreens last year, private health insurance exchanges failed to sign up any major companies for 2015, according to Reuters.
Private exchanges are gaining ground in a competitive health insurance marketplace, with roughly 3 percent of large employers using them this year and 28 percent expected to do so within five years. However, this growth is a bit slower than expected.
Large employers are in "wait and see" mode, Brian Marcotte, CEO of the National Business Group on Health, a lobbying group for large corporations, told Reuters. These companies want proof that the insurance exchanges will, in fact, save them money.
One reason that they may not, Avalere Health CEO Dan Mendelson told Reuters, is because large employers are able to negotiate lower prices for benefits in ways that an insurance exchange cannot. Moreover, those large employers who do express interest in exchanges ask for as many as five years' worth of insurance premium and medical claims data. Finally, uncertainty about the future of the Affordable Care Act leaves many companies reluctant to make any sudden moves.
This wait-and-see approach proves costly for private exchanges, Reuters reported. Aon Hewitt will lose money this year, while Cigna says the pace of growth in its exchange is slower than initially expected.
Private exchange enrollment in 2015 may not have gone as planned, but insurers still see value in exchanges. For example, Aetna's acquisition of Bswift shows that insurers take exchange businesses seriously. In addition, Blue Cross Blue Shield of Michigan found that private exchange boosts price transparency, as consumers on an exchange are much more likely than those with an employer-sponsored plan to know how much their employers contribute to their plans.
For more:
- read the Reuters article
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