10 myths about private exchanges
Published July 28, 2015 10:37 AM
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Updated August 26, 2015 10:39 AM
1 Min Read
Private exchange growth is expected to explode by 2018. But many employers and brokers alike still struggle with the definition of an exchange. At EBAs recent Private Healthcare Exchanges conference in Chicago, Ann Mond Johnson, adviser at ConnectedHealth, and Matthew Levin, executive vice president at Aon, shared the top 10 myths about these exchanges.
10) Private exchanges are identical in their value proposition
According to Leavitt Partners, there are more than 200 private health care exchanges. Just like 2016 Republican presidential candidates, there are a lot of private exchanges and all offer their own value propositions, Johnson says.
9) Private exchanges are only for defined contribution and full-time employees
This is one of the biggest myths of all. People make a private health care exchange synonymous with defined contribution and that couldnt be any further from the truth, Johnson says. No matter what you call a private exchange, they are fueling and leveraging technology, she adds, and a private exchange makes it easier for employees to choose, select and manage benefits.
8) Private exchanges provide value only to jumbo employers
As long as the backend system is robust on a private exchange, you can deliver solutions to help the entire workforce, Johnson says. They provide especially good value for jumbo employers, adds Aons Levin. What we are doing today is taking advantage of leveraging historic platforms we built and innovation in how benefits were offered and administered, he says.
7) Cost benefits from private exchanges are only associated with employee buy-down
The cost benefits come from other parts of the private exchange, including resource management, Johnson says. A lot of employers still use paper and pen. The fact that private exchanges offer a better process so HR can go on to bigger and better things is the cost savings and value of private exchanges, she explains. If you go in with expectation of buy-down, you are totally misleading everyone.
6) The CFO has no interest in a private exchange
A TD Bank survey of 1,500 Americans found 70% of those surveyed said financial health can have an impact of overall health. We know there is increasing evidence around health being linked to financial acumen, Johnson says. From the CFOs perspective, the take away is around productivity and presenteeism, which they are very much interested in.
5) Employees dislike shopping on private exchanges
While employees previously would spend a few minutes enrolling in health plans, they are spending close to a half hour shopping on a private exchange, and 88% of consumers like being able to choose their own carrier, Johnson says, according to her companys data.
4) Consumers dont know how to make health care decisions
This is a big myth and a big disservice, Johnson says, a disservice to believe people dont know how to make health care decisions. She points to consumers increased use of urgent care clinics as consumers are starting to engage and make decisions and are more efficient at creating a value proposition, she adds.
3) Private exchanges have nothing do with employee engagement
Private exchanges are a gateway to engagement and much better than paper and pen. But part of the challenge is communication, and this is where HR departments need to invest in exploring ways exchanges can a beneficial item for the entire employee population, Levin says. Engagement scores are tracked closely and [are] a big way to sell exchanges, he adds.
2) Only health insurance will be offered on private exchanges
People want more choice, and bundles that people buy are becoming increasingly sophisticated, Levin says. The Aon exchange launched with medical, dental and vision and quickly expanded into other product lines. God forbid we achieve what we have been trying to do with benefits forever: Better health care decisions so [one can] fund retirement savings, Levin says.
1) Private exchanges are a fad that is going away
Johnson says look at Amazon.com. When the online retailer launched, its first holiday season was lackluster, but now it is embedded in our lives. The whole idea of convenience, the whole idea of options, choice, transparency is an expectation that we have in the rest of life and [are] bringing lock, stock and barrel into health care, she says. Levin says the Aon exchange is growing every year, and the number of inbound requests for proposals grows, the number of carriers grows every year, and the momentum really does feel like its not going to reverse.
