Both rising premium costs and healthcare reform are seen to be driving the demand for private exchanges, according to a new survey report by Array Health.
The report, “Health Insurers Expected to Broaden Distribution Channels, which projects how health insurers and employers plan to participate in health insurance exchanges in the coming months show that 70 percent of health insurers are expected to participate in both private and public in the next six months.
The survey gathered feedback from attendees at the Defined Contribution Healthcare & Private Exchanges Summit in Carlsbad, CA and subscribers of Atlantic Information Services (AIS) health insurance publications.
The results, which are depicted in an infographic shown below, indicate a promising future for private exchanges, and that many employers are aware of the benefits that private exchanges can deliver when coupled with a defined contribution funding model. Other key findings from the report include:
- Most employers are aware of private exchanges, but consumers are largely unaware. Eighty-nine percent of respondents believed that employers were aware of private exchanges, while only 30 percent of respondents believed consumers were familiar with them.
- Private exchanges provide a great opportunity for employers to control costs and offer benefit choice. Ninety-three percent of survey respondents believe there will come a time when more employers will use a defined contribution funding model as opposed to the traditional defined benefit model—and nearly 70 percent believe that will happen within the next five years.
- Most insurers will pursue a multi-channel exchange strategy. When asked how they believed insurers would participate in exchanges, nearly 80 percent of respondents believed insurers would participate in private exchanges. This is likely due to increasing demand from employer groups and growing awareness about private exchanges in the marketplace.
- Young, healthy consumers coined the “young invincibles,” offer health insurers a new target market. More than three-quarters of survey respondents believe that up to 50 percent of healthy, young consumers won’t comply with the Patient Protection and Affordable Care Act individual coverage mandate, and more than one third of respondents believe as many as 75 percent won’t comply. Insurers and public entities must find ways to attract and engage this young, Internet-savvy population to increase enrollment.
The survey was conducted among representatives from insurance companies, software and services companies, producers/brokers, providers, consultants, third party administrators and other healthcare professionals. The survey was initially distributed to attendees at the Defined Contribution Healthcare & Private Exchanges Summit in Carlsbad, Calif. on July 29, 2013 and then again in August 2013 to AIS subscribers. The survey closed to responses on August 31, 2013. The results of this report are compiled from 144 anonymous respondents. All percentage calculations were rounded up to the nearest whole number.
Download the survey report.