Payers turn attention to building private exchanges

With the deadline for the health insurance exchanges less than a year away, insurers increasingly are deciding to build their own private marketplaces to compete with the state and federal-run versions.

Just last month, Blue Cross Blue Shield of Kansas City said it would create a private exchange for its large-group members, primarily because of the success the insurer has seen in its small-group private exchange. Blue Cross launched the Blue KC Exchange last November, and one-third of its small-group business already has migrated to it, Danette Wilson, Blue Cross group executive for external operations and chief marketing executive, told The AIS Report.

Private exchanges have "addressed employers' concerns about affordability and continuing to have an employer-sponsored plan," Wilson said. "It gives employees more choice than they have today … and more decision support that they ever had, which is critically important to satisfaction."

Blue Cross has partnered with Benefitfocus, the country's largest benefits technology company, to help build the exchange platform, including support for defined contribution and other plan financing mechanisms.

Like Blue Cross, Health Care Service Corporation will launch its own private exchange next year. HCSC bought a majority stake in Bloom Health, which operates an online marketplace, in September 2011, FierceHealthPayer previously reported.

"I've gone out and personally have met with 55 of our national accounts … and it became abundantly clear from [those meetings] that the path we needed to move toward was a group exchange model," Jeff Welch, HCSC's divisional vice president of consumer and emerging markets, told The AIS Report.

HCSC likely will offer its mid-market clients "product packs" containing about six plan options, whereas its national account clients can select which options they wish to offer their employees.

To learn more:
- read the AIS Report article

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