Array Health Solutions reports more evidence that private health insurance exchanges are at the beginning of an explosive growth spurt. We’ve been excited about the rise of private health exchanges for a while, as a way to bridge the gap between employer-based health benefits (a status quo with incredible inertia) and individually owned health benefits (which is a much better arrangement for both employers and individuals). Our argument is described here.
Array surveyed insurance experts. The key findings:
- More than half of insurer respondents said they will use a private single-insurer exchange as a sales channel this year;
- More than 75% of respondents believe most insurers will offer private single-insurer exchanges by the end of 2016;
- Insurers will sell to all market segments via private single-insurer exchanges;
- Employers are expected to move their sponsored health benefits onto private exchanges by 2016;
- Insurers will expand their offerings on private exchanges beyond core medical, dental, and vision.
One small issue of concern is that insurers plan to offer single-insurer exchanges rather than participate in multi-insurer exchanges. Obviously, plan participants have more choice in a multi-employer exchange. Nevertheless, it is understandable that an insurer would prefer run its own exchange, offering only its own policies. This may be an aspirational goal, rather than a realistic one. Benefits consultants have succeeded in developing very credible multi-insurer private exchanges, and it is unclear how insurers can by-pass this channel in many markets.