The idea that it would be good to shop for your insurance plan is a popular one, so much so that a variety of options has emerged to cater to that need along with the marketplaces established under Obamacare
They include private exchanges providing employer-sponsored benefits, as well as Web brokers that allow individual consumers to shop for plans across all of the health plans in a particular market. The emerging landscape raises questions about how the public and private entities will cooperate and compete.
The cooperation element comes through the possibility of blending private and public exchanges. Alan Cohen, the chief strategy officer of Liazon—one of the earliest providers of private exchanges—said that blending can make sense as a way to expand outreach and provide more options.
Web-based brokers can list public exchange options, for example. And blending private and public together can also make sense for some larger firms, Barbara Gniewek, the principal of PricewaterhouseCoopers' global human resource services, said in an interview. Larger firms, she said, can offer some populations associated with the firm—under-65 retirees, or part-timers—access to public exchanges through “concierge services” associated with their private exchanges.
“As a private exchange, you can show [potential customers] things that aren't part of the public exchange,” Cohen said. Those options will generally come without subsidies, which will make those options unaffordable for many. But since a certain sub-population bought plans on the public exchanges without subsidies, the expanded options offered by a private exchange targeting the individual market might make sense.
Cohen said he's encouraged by how public exchanges are willing to work with their private counterparts and web brokers. “There's probably a cooperation happening there. … They should work in a synergistic way.”
But private and public exchanges have a bit of a rivalry for small businesses. Part of the effort to build exchanges came with the SHOP, or Small Businesses Health Options Programs, which have generally struggled. California, for instance, has only signed up
approximately 10,000 people through its small-business exchanges; Connecticut, acclaimed as one of the most successful states for exchanges, only signed up
330 people by April.
Perhaps not coincidentally, the state relieved its SHOP contractor of its duties, having paid the firm—HealthPass— approximately $3.7 million. (Connecticut governor Dannel Malloy said
the small business program “need[s] to have more success” during a May Center for American Progress event.)
That lack of success has been accompanied by several rules delays from HHS. On June 10, HHS allowed
18 states to delay offering small businesses expanded choice in health plans, confining them to only one choice.
The delay has caused several observers, including Cohen, to conclude agencies are focusing resources on the individual market exchanges. At this point, Cohen elaborated, he doesn't even see his firm and the government as actual competitors, even though shopping through SHOP grants small businesses access to tax credits defraying the cost of premiums.
That's something National Federation of Independent Businesses manager of legislative affairs Kevin Kuhlman would like to see remedied – he'd like to see more competition, whether private or public.
“For all intents and purposes, the SHOP has failed to launch,” he said. “Private exchanges are probably more attracted to the larger employers and the large group market at this time, but it is our hope that they come more downstream.” NFIB, of course, has been critical of the Affordable Care Act and filed one of the lawsuits against the law that reached the U.S. Supreme Court.
Kuhlman agrees that the SHOP exchanges have faltered due to a lack of resources and attention, and has been lobbying for rules that make them look more like private exchanges—allowing for lower minimum participation rates from employers, and more of a defined-contribution system.
Kuhlman calls the private exchanges “more creative and innovative in offering arrangements,” something that Leavitt Partners' senior director of exchange technology, Dan Schuyler, agrees with.
“The private sector, with respect to group insurance, (has) done a better job—with outreach and education, onboarding, providing consumer decision support tools, and all the ancillary benefits that a private exchange can offer,” Schuyler said.
Schuyler thinks the main question affecting broader pick-up is the comfort level of employers. “There's still a big learning curve for employers. There are so many different models; employers have had to do a lot of due diligence,” and it will be some time, he concluded, before we know the results.
Michigan insurers are asking for a wide range of premium changes for next year, the AP reports
. Larger insurers—such as Blue Care and Blue Cross Blue Shield—are asking for big rate hikes just over 9%.
A Blue Cross executive claimed the requested hikes are due to uncertainty, saying, "We've got a big influx of people and we don't know what their claims conditions are. The actuaries are concerned about that risk mix.”
But some smaller insurers are submitting plans to drop premiums—one is even planning on dropping premiums by 21.6%.Follow Darius Tahir on Twitter: @dariustahir