Private exchanges. Where do they fit in with your business and within the health care reform puzzle?
Early predictions show that the private exchange sales channel could potentially upend traditional group markets, as well as command attention among public exchange shoppers. Some reports forecast that enrollment in private exchanges could not only meet, but exceed, enrollment in federal and state exchanges in the next several years. These predictions say that by 2017, private exchanges will have gained enough momentum to equal public exchange enrollmentand that this momentum is so significant that by 2018, private exchange enrollment will exceed public by 10 million members.
Private exchanges also offer a viable sales vehicle for brokers both in the group and individual markets. With a predicated 8-18 million (quite a range, we know) lives covered by 2017, the biggest saturation of enrollees resides in the small- to mid-group market (50-199 employees) according to a recent Booz&Co. report.
Many private exchanges are popping up from brokerage firms to carriers to independent companies. But, which one is right for your clients? Which private exchange should you align with to capture this growing segment of the market?
Consider these factors:
1) ENROLLMENT SUPPORT
A recent Washington Post article cited a Carnegie Mellon study, which found that only 14 percent of participants could actually understand and identify fundamental, basic insurance features and terminology, such as deductibles, co-pays, co-insurance and maximum out-of-pocket expenses.
The majority of consumers simply do not have a clear or comprehensive understanding of how benefits work or about key terminology that surrounds most insurance plansfrom medical to ancillary. And these are the people who consider themselves primary or secondary health care decision makers in their families.
When consumers shop for a car, for example, they generally know the features they want and understand what theyre buying. But, when it comes to selecting health care insurance products, consumers just arent as savvy. Traditionally, human resources departments or insurance brokers have been readily available to help choose and assist in making this very important decision. The paradigm shift with health care reform will affect many, from the type of doctor they see to what coverage best fits their needs.
With the emergence of private and public exchanges, many consumers are being moved from a hand-held, consultative, in-person open enrollment experience with a broker or HR representative to a self-directed online enrollment. Theyre used to having someone available to walk them through the plans and help them understand the benefits. Being moved to an online shopping experience, however, will undoubtedly create confusion for consumers about selecting the right plan for their needs and budget. This is why support tools such as videos and educational materials are going to become critical to employee satisfaction, as well as to the success of exchanges in the eyes of the consumer.
Keep in mind that finding a private exchange that offers support extends beyond educational support. The content thats presented should be authentic, transparent and create an approachable experience for the user. Private exchanges that create a warm, inviting and friendly online experience provide a sense of familiarity and comfort to the user. And as you well know, employee satisfaction trickles up to group satisfaction and retention.
2) THE BELLS AND WHISTLES
A private exchanges features are a top priority. Youre going to want to find a system that provides a high level of service, and that has many tools and features, both for brokers AND groups and employees.
Weve seen some exchanges that can be one-sided (great tools for the customer, but really dont factor in the broker relationship) or those that are broker-friendly but dont provide much in the way of customer support and enrollment educational tools. These ultimately drive group and employee satisfaction.
Find a balanced platform one that supports the critical broker relationship and also provides tools for HR and employees to manage their benefits, as well as answers the many questions they will have during online open enrollment. Single source billing is a great feature to look for in your search, too.
3) GETTING TECHY
Technology plays a significant role in the private exchange platform.
As much as technology is driving almost every other industry, it is also impacting health care. System flexibility and personalization features are no longer optional to the digital customer: theyre expected. As we see technology advancing, we will see our choices and connections improve from a desktop to a Smartphone.
From a consumer standpoint, providing a clean and easily navigated site is important. Private exchanges should be more than just a website. As a benefits broker, youll need to look at how well each private exchange planned for how the user will complete tasksand if those tasks are intuitive.
Of course, data security is also critical. Private exchange platforms should be sensitive not only to the regulatory mandates, but to expectations of the consumers regarding their health information security. You should find out their security processes and go with the one that has the best accreditations and certifications for quality management.
Change is in the air with the launch of exchange, both public and private. While navigating the new health care landscape, keep these points in mind as you research private exchanges and begin to align yourself with the best one for you and your business.
Below is a preview of a private exchange platform. Take a peek and see what the Private Exchange buzz is all about.