Study: Enrollment in Private Exchanges Likely to Grow

Enrollment in private health insurance exchanges is likely to match enrollment in public exchanges by 2017 and may exceed it in 2018, an Accenture study found. According to the Accenture analysis, private exchange participation will approach public exchange enrollment levels as soon as 2017, and surpass them soon after. The result: In 2017, approximately 18% of the American public will purchase insurance through exchanges, radically transforming the health insurance landscape. Many employers favor private exchanges because they offer defined contribution plans and opportunities to customize supplemental offerings such as dental, life and disability products.

While public exchanges will be government operated, private exchanges are being developed by consulting firms, such as Aon Hewitt, Mercer, and Towers Watson, as well as retailers, such Walgreens, and even insurance brokers.  Health insurers are not only joining private exchanges, some like Aetna and Cigna have plans to develop proprietary exchanges of their own. 

Participating in a private HIX provides something of a win-win for insurers and employers. Both have been looking for ways to extract themselves from the annual uncertainty of renewing healthcare benefit contracts. The advantage of defined contribution for employers is that it takes the guesswork out of budgeting for healthcare costs from year-to-year, and benefits employees by providing decision support technology that enables them to choose benefits that make sense for their circumstances.