Private Health Exchange: Satisfaction Comes from Greater Choices

With the much awaited arrival of public health exchanges, private health exchanges are being developed by private insurers. These are online entities that seek to challenge the appeal of state healthcare exchanges with their own set of unique features.

Many experts believe that private health exchanges might perform better than public health exchanges. For starters, they would offer a greater number of choices by showcasing multiple carriers. Even insurers listed on state exchanges would be allowed to sell on private health exchanges.

Just like state exchanges, private health exchanges would be run by medical insurance software solutions. Secondly, private health exchanges are most likely to offer more privileges than the shop exchanges that will be run by public exchanges. They will provide an online platform to full time employees for purchasing employer-contributed coverage, allowing employees to choose a health plan best suited for themselves and dependents.

Private exchanges are also being referred to as corporate exchanges. These exchanges will feature multi-insurer online platforms that will be open to public rather soon. By 2014, most of the bigger carriers and agents are likely to have their own private health exchanges.

Unlike public exchanges, private exchanges don’t need to offer highly subsidized policies for the low-income individuals. On private exchanges, insurers can sell plans that meet ACA guidelines but price them according to their own preferences. This means private exchanges are more likely to engage employers from the high-income groups as long as they maintain compliance with state regulators.

Further, the defined contribution model is getting more popular as compared to defined benefits model. This means that the small group market will see entry of millions of employees who will seek to combine an affordable health plan where the employer can contribute a fixed amount. This means people will be more demanding in terms of information and calculations. Private health exchanges are likely to cater to such requirements by launching insurance quote engines and offering a plethora of plan choices.

During 2013 some employee enrollments private health exchanges has already been seen. By offering health insurance coverage through private exchanges, employers are stepping back from their employee benefit management responsibilities, passing on a greater range of responsibilities to the online capabilities of the exchange. This is akin to outsourcing operations of an organization and creating more time for handling core employer functions. Private exchanges ensure that employers can maintain compliance with the ACA mandates.