The Blue Cross and Blue Shield Association will build a private health insurance exchange in the hopes of retaining workers who age into the Medicare program, the not-for-profit health plan group said Friday.
The goal is to offer a site with “one-stop shopping for the Medicare population,” said Jody Voss, vice president of strategic business services at BCBSA. The exchange will allow employers to offer supplemental Medigap policies, as well as Medicare Advantage and Part D prescription drug plans, to their employees. Eventually, the exchange could also sell ancillary products such as vision, dental and life insurance.
Blue Cross and Blue Shield plans cover roughly 1 in 3 Americans and are prominent in the employer and individual markets, but their market share in the private Medicare Advantage market lags behind large carriers such as UnitedHealth Group and Humana. Despite complaints over reduced reimbursements, health insurers view Medicare Advantage as a major source of growth—enrollment in the program has grown by more than 8% annually since 2010.
The retiree exchange will launch this summer and be ready in time for fall, the traditional open-enrollment time for employers. Blue Cross and Blue Shield plans operate 27 other private, local exchanges throughout the country, Voss said. But this will be the association's first national exchange.
“As people retire, they don't necessarily retire where they are working,” Voss said. “We want to make sure they have access to those Blue products.”
The Blues' Medicare-focused shopping site also reinforces the marketplace's confidence that private exchanges—and exchanges in general—are becoming more prevalent. More than 12 million people bought a health plan this year on an exchange established by the Affordable Care Act, and another 6 million selected their employer-based health benefits through a private exchange.
Private exchanges presumably offer people more plan options, but critics view the mechanisms as a way to move toward defined-contribution benefits, which could stick people with the uncertainty of higher premiums and out-of-pocket costs.
BCBSA hired Connecture to build the exchange. Connecture is a publicly traded technology company that powers and designs Web-based health insurance exchanges. It already has contracts with the federal government to manage Medicare.gov and several state Blue Cross and Blue Shield plans. Financial terms were not disclosed.