Health Care Exchanges Good for the Consumer
If the Affordable Care Act disappeared tomorrow there would be two significant and impactful results – a better educated health care consumer and a shift towards defined contribution plans and private exchanges. We’ve long suggested that a shift to smarter consumers is a direct result of the Affordable Care act. Consumers are shopping around, switching plans, and making decisions. Both public and private health exchanges are helping to engage consumers in a way we’ve never seen before.
A recent Deloitte report on health care consumers and public health exchanges (HIX) sheds some interesting light on consumer behavior and public health care exchanges. The study, “Public health insurance exchanges: Opening the door for a new generation of engaged health care consumers,” discovered that 45% of those renewing a plan in an HIX, switched to a different plan in 2015, with price being a primary reason for the switch. Consumers in public health exchanges had a great understanding of their benefits than those who were either being provided health care from their employer or on Medicaid.
Interestingly, the study also shows something that we’ve long known as administrators of several private health care exchanges – consumers are looking for “better alignment with their personal needs.” Consumers are interested in technology that helps them make choices and compare plans and prices but interest in using far exceeds actual use so far.
As private health care exchanges continue to grow in popularity, they will learn from the experience of consumers in the public exchanges. So far, however, private exchanges can boast that they offer far more options, greater security and a plethora of ancillary products. As employers move to private exchanges, they will find that their employees are embracing these features more and more.
Private exchanges have the added benefit of an employer’s benefits administrator. While public consumers understood the costs and benefits of the plans they selected, the study concluded that there’s a “potential need for better information, communication and education on coverage details,” because the level of understanding does not exceed 60%. Any employer migration to a private health care exchange must take into consideration this need for additional education for employees. Your benefits administrator will play an essential role in the implementation of a private exchange.
With price as the driving factor in both consumer decisions and employer plan decision, employers may want to consider exchanges that offer a variety of options including limited provider networks, higher premiums and co-pays, and health management programs. In addition to helping employees save money – these will ultimately save the employer money as well.
One of the best resources for employers looking for information on private health care exchanges is the The Institute for Health Care Consumerism (IHC). IHC offers many thoughtful articles on the growth and popularity of private exchanges. A recent article entitled “Private Exchanges Leading to Both a “Buy-Down” and “Buy-Up” Effect” concludes that:
“A private exchange is the ideal solution to help people navigate choices, evaluate options and “right-size” their benefits. When people are provided money to spend on benefits and multiple plan options exist – in conjunction with a robust decision-support tool that helps them evaluate choices – they behave differently. By becoming more educated benefits consumers, people behave more efficiently and buy only those plans that they need.”
Need we say more?