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Growing pains for private health insurance exchanges

Private health insurance exchanges can balance promises and priorities to sustain hypergrowth.

Overview

Private health insurance exchanges are experiencing hypergrowth. There is enthusiasm and adoption among employers, consumers and carriers alike. Accenture predicts that private health insurance exchange participation will approach public exchange enrollments by 2017—if not sooner, as enrollment figures indicate an earlier-than-expected growth spurt. Accenture estimates there were more than 3 million individuals that enrolled in private exchanges during the 2014 benefit year.

While rapid growth is encouraging to exchange sponsors, it’s important to consider how exchanges can sustain this positive trajectory. Now that the first material open enrollment period has concluded, exchange sponsors have the opportunity to reflect on what has worked and what hasn’t.

>READ THIS SHORT PAPER TO LEARN WHERE PRIVATE HEALTH INSURANCE EXCHANGES ARE FEELING GROWING PAINS.

Background

Employer expectations, and corresponding service levels and capability maturities, vary widely across private health insurance exchange models. However, no matter how “premium” or “simple” the exchange, there are basics that all private health insurance exchanges must get right to sustain their growth. Lagging “back-end” benefits administration capabilities will emerge as a likely culprit restricting some exchanges’ growth trajectory.

Advancing the “front-end” consumer marketplace will also distinguish leading exchanges. Consumers expect the retail-like, personalized and data-driven experience that they get in other parts of their lives.

>DOWNLOAD THE FULL PDF TO LEARN MORE.

Analysis

Private health insurance exchanges face challenges in these areas:

Eligibility and enrollment—Variances among the workforce (full-time vs. part-time, geography, etc.) can influence differences about what products are offered and how much is subsidized by the employer. Exchanges should manage these variances, which becomes even more challenging with new defined contribution strategies that may have a number of permutations across employee groupings.

Data management—As exchanges allow employers to offer an expanded set of products across multiple carriers, the amount and complexity of data being managed also grows. With such a large volume of information, issues arise around how to pass data back and forth across organizations or how to handle exception processes and reconciliation.

Billing and financial management—Many exchanges are deferring billing functionality or delegating it to carriers altogether, providing data files that say, “here are the products your employees purchased, and here is how much to take out of employees’ paychecks.” Mature exchanges will help emulate the ideal experience: an employer pays one bill (consolidated billing) across all carriers and products with assurance that the balance matches employee elections on the health insurance exchange (reconciliation).


>LEARN MORE ABOUT THE BACK-END CHALLENGES PRIVATE EXCHANGES ARE FACING. [PDF , 331 KB]

Recommendations

Private health insurance exchanges can improve the front-end experience by focusing on:

Personalized decision support powered by analytics—Personalized decision support tools better enable consumers to assess/predict their own benefits utilization to drive product recommendations. Advanced analytics may also help with product recommendations by showing products that “people like me” may have bought.

Integration with provider look-up tools—Most exchanges today link to carrier tools so that a consumer can manually determine which products cover which doctors. Integrating these tools will make it more convenient for consumers to understand this critical factor in the decision-making process.

Product bundling—When exchanges enable a retail-like experience, consumers will see recommended product bundles that are pulled from a fuller library of health and ancillary products. Ultimately, the overall shopping experience will be faster, and checkout will also be simplified and expedited.

Integration with savings and spending accounts—Front-end integration with healthcare savings and spending accounts makes it easier for users to manage current and future contributions/balances. This information could also feed into the decision support tools, better enabling consumers to forecast the longer term financial impacts of their elections.

>READ THIS SHORT PAPER FOR MORE DETAILS ABOUT FRONT-END IMPROVEMENTS.