Why consmers, payers and employers are turning toward private exchangesSo, we want to know why consumers, payers and employers are turning toward private insurance exchanges.

Could private exchanges be the alternative to Obamacare? Why are private health insurance exchanges gaining in popularity? What are the trepidations from an employer and payer perspective? How did they emerge? What are the features and benefits?

We are all, or most of us anyhow, familiar with the public exchanges which are called marketplaces. These marketplaces are government sponsored and managed at either the federal or state level, depending upon the option chosen by each individual state. Some of us know about the exchanges because they have been the talk of the government for quite some time and all over the news. Others of us are more familiar with them because of the www.healthcare.gov debacle in which one technological issue after another has enabled fewer consumers to actually complete the enrollment process than would have otherwise.

On the other side of the coin, and not receiving as much publicity are the private insurance exchanges which are managed independent from the government by agents and brokers.  A private exchange is a business entity run by brokers and agents which enables consumers to shop, enroll, and fund insurance plan choices. Some of the advantages include on-line access to compare and contrast plans, the ability to purchase supplemental insurance such as dental, vision, or disability, and to provide guidance and recommendations based upon individual consumer needs. Additional support is provided throughout the process as well as after enrollment is complete which contributes to the one-stop shopping concept.

Why are private insurance exchanges emerging and growing in popularity?

The simple answer is the result of supply and demand and the quest to reduce healthcare spending. Healthcare costs are rampantly rising causing employers to review all contributing factors to their rising costs/expenses. Why consumers, payers and employers are turning toward private exchangesOne such result is switching from defined benefit to defined contribution health plans which enables employer to both cap expenses and limit future liabilities. Consumers are demanding more choices, better education to make those choices, and the ability to purchase not only major medical but supplemental offerings such as dental. The private exchanges provide for portability in ensuring a smooth transition when changing employers. Multi-carrier private insurance exchanges are emerging as well in order to provide additional choices to consumers while providing risk sharing opportunities.

Employer Concerns about Private Insurance Exchanges

Both employers and payers have valid concerns which lead to their hesitation in joining or creating private insurance exchanges. Some of the employer concerns include:

Payer Concerns about Private Insurance Exchanges

Not only do employers have concerns, but so do payers. Following are some of those concerns:

What are the Features of a Private Exchange?

Why consmers, payers and employers are turning toward private exchangesPrivate exchanges are on the rise. Many think they will help reduce healthcare costs. They do provide an alternative to the public exchanges sponsored through the federal and state governments. There is hesitation by employers and payers as they are still very new and no one really knows what will happen with healthcare reform. It will be interesting to see if the hurdles are overcome providing viability and sustainability in an otherwise chaotic healthcare environment.