Business of Health: The looming health insurance revolution

I have seen the future of health insurance.

It happened this spring, in a conference room at the Oklahoma Medical Research Foundation. There, a benefits consultant gave a team of OMRF executives a demo of its private health care exchange software.

Thanks to the Affordable Care Act, you are probably familiar with the concept of health care exchanges. These virtual marketplaces allow consumers to choose among a variety of health care insurance options to find the one that best fits their needs and budgets.

Private exchanges are the same — but different. Right now, about 6 million Americans receive their health insurance through these exchanges, which allow employees to select their coverage from a number of different health plans offered through and subsidized by their employers.

The idea behind private exchanges is that health care is not a one-size-fits-all proposition. If you’re a young, healthy 20-something, you probably don’t require (or want to pay for) the same coverage as employees who are nearing retirement. Yet under the current model, employers must devise a single plan — or maybe two — to provide for the needs of both of these individuals, not to mention hundreds or thousands of others with distinct and varying needs.

Inevitably, these plans end up fitting each individual employee about as well as that giveaway Thunder shirt you find on your seat at the Chesapeake Arena. Private exchanges, in contrast, allow each worker to pick a plan that best suits his or her individual needs like a custom-made garment.

With private exchanges, employers give each employee a set amount of funds with which to purchase health insurance and other insurance needs (things like vision, dental, life and long-term disability insurance). The employee then uses a web portal to browse through a wide variety of plans to pick the coverage that best suits his or her needs.

Right now, most of these platforms allow workers to choose only among options offered by a single carrier (such as Aetna, United Healthcare or BlueCross BlueShield). But as more and larger employers adopt these exchanges, we’re starting to see the emergence of multi-carrier options, which allow workers at a single company to pick from plans offered by a variety of insurers.

At first blush, 6 million people might seem like a small slice of the employer-sponsored health insurance market, which covers roughly 150 million Americans. But this number is double last year’s figure of 3 million. The consulting firm Accenture projects that the market for private exchanges will continue to grow at this clip, estimating that within three years, we’ll see 40 million Americans enrolled in private health exchanges.

View the original content and more from this author here: http://ift.tt/1IBBrBU

from health IT caucus http://ift.tt/1MEEYxU
via IFTTT