Report Examines Potential for Private Health Insurance Exchanges to Change Employer Market
A new Kaiser Family Foundation report examines private exchanges and how the approach could reshape employer-sponsored health insurance as it gains popularity. These private exchanges have gained currency as new health insurance marketplaces for individuals have begun operating under the Affordable Care Act, though the approaches are quite different.
The report estimates that at least 2.5 million people now get health coverage through private exchanges, and the market is poised to grow. According to the recently-released Kaiser/HRET annual employer survey, 2% of large employers have adopted a private exchange approach, and 13% who have not say they are considering it.
The new resource describes who is building private exchanges, how they work, how employers of varying sizes are using them, and what growing participation could mean for employers and consumers. One key element of a number of private exchange approaches is the use of “defined contributions” for health coverage, providing employees a fixed amount of money for buying insurance on the hubs. That shift would give employers greater control over how much they spend on health benefits, though also could increase the financial burden for consumers if employer contributions don’t keep up with growing health care costs.
“Examining Private Exchanges in the Employer-Sponsored Insurance Market” draws from interviews with representatives of more than a dozen private health insurance enrollment platforms, as well as employers and health plans moving toward the approach.