Private Insurance Exchange – Health Insurance Brokers To Join Travel Agents In The Unemployment Line

In a nutshell, a private insurance exchange is an online marketing tool. You may look up rates, but underwriting will ultimately determine what the real rates are going to be. Don’t get too excited about these exchanges – you already experienced  a similar version over the years, it’s called a spreadsheet. But, as you will see in the commentary below, some get quite excited about the ability to purchase insurance in the privacy of their homes without a pesky salesman breathing down their neck.

I love searching for and booking all my travel needs on one online site like  Travelocity. It streamlines the process, minimizes paperwork and saves me  valuable time and energy along the way. Some payers are hoping health insurance  exchanges can provide a similar value to customers shopping for health  plans.
And they’re beginning to put their money where their mouths are.  Since last year, private exchanges run by insurers have been cropping up around  the country. Highmark and Blue Cross Blue Shield of Kansas City established  exchanges last year. WellPoint, Blue Cross Blue Shield of Michigan and Health Care  Service Corporation bought a 78 percent stake in Bloom Health, an online marketplace offering health plan  options to almost 50 companies. And in Iowa, where state lawmakers decided not  to pursue a state-run exchange, legislators are urging insurers to establish their own private exchanges. These  privately run marketplaces would be free of government oversight, fees and taxes  and would have ample funding available from insurers’ cash in reserves.
“Private exchanges–regardless of the Supreme Court or the election in the  fall–are going to reach into all facets of what we do,” Kathy Dunmire, vice  president, product management at Blue Cross Blue Shield of Minnesota, told FierceHealthPayer. “Just like today when travelers can book flights,  cars and hotels in one place, our industry is going to use private exchange  platforms to make the buying process easier, more understandable and less  expensive for our members.”
And Dunmire should know. In July, her  company will be rolling out its own private exchange called Blue Choice, a  defined contribution model for employers run by eHealth.
Blue Cross was  motivated to create the private exchange in response to “three, overriding  market demands,” Dunmire said. Members wanted more choice and transparency;  employers needed greater ability to control costs; and members and employers  want easy-to-use solutions and help from Blue Cross and our brokers in  navigating the increasingly complex world of health benefits.
Just like  booking a flight online, Dunmire explained, Blue Choice allows members to  compare multiple plan options and choose the one that’s best for them and their  family based on what’s most important to them, for example, monthly premiums,  deductibles, network or benefits.
“Our goal for Blue Choice is to give  employers more control, agents and brokers a way to provide value to their  customers and employees greater choice,” she said.
Further fueling  insurers’ interest in private exchanges is the increasing modernization of  insurance products and insurers’ need to continually differentiate their brand  from their competitors. Plus, exchanges allow insurers to reinforce their value  composition to customers, Bill Hanis, vice president of eHealth technology and  exchange solutions, said.
“The process is paperless and efficient, with  all information at the employees’ fingertips,” Hanis told FierceHealthPayer.
Dunmire echoed that sentiment. “We see Blue  Choice–the exchange technology–as a platform for how we do business in a  market that is increasingly moving toward an e-commerce model,” she  said.
Although there’s no one set purpose for private exchanges, Hanis  said, they generally serve as an alternative distribution method for payers to  promote their products. “That could be individual, senior, group products; all  exist in exchanges and are gaining in popularity,” he said. Indeed, eHealth’s  total membership, including individual and family plan enrollees, has increased  every year, with a 57 percent increase in total estimated membership from 2007  to 2011.
The growing interest in private exchanges makes Dunmire  confident that Blue Choice will serve as a valuable and promising option for  many employers. However, she recognizes that it’s still early in the market, so  Blue Cross expects “a growth curve similar to that of defined contribution  pension plans or consumer-directed health plans.” That’s why Blue Cross made the  Blue Choice platform scalable, allowing the insurer to “continue to grow the  exchange to meet evolving market needs.”
I look forward to one day  lounging on my sofa as I research and eventually purchase my health insurance  plan online on my laptop. And then I can switch tabs and quickly book a flight  to visit family and, while I’m at it, even order a pizza too. –Dina (@HealthPayer)

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