Private health exchanges experience hyper growth spurt

An estimated 3 million people in the United States currently receive employer health benefits through private exchanges, according to a report from Accenture, released at the annual America’s Health Insurance Plans (AHIP) Institute in Seattle. Compared to Accenture’s forecast last year, this is three times the number of people expected to enroll in private exchanges for 2014 benefits.

Findings project total enrollment in private exchanges will eventually surpass state and federally-funded exchanges, reaching 40 million by 2018.

“With the growth of private exchanges, employees are faced with benefit trade-off decisions,” says Rich Birhanzel, managing director for Accenture Health Administration Services. “This trade-off increases the amount of reimbursement that both doctors and hospitals will collect from patients. Our research estimates a 7% increase [$3.7 billion] in out-of-pocket collections from patients with employer-sponsored plans by 2018.”

The research highlights the hyper-growth of private exchanges, according to Birhanzel.

“Private exchanges can give consumers a retail-like experience, enabling them to have a simplified, faster shopping experience,” he said. “With the growth of private exchanges, employees will be given increased choice about their health coverage, but will also be faced with complex financial tradeoff decisions.”

Accenture estimates that 25% of those currently enrolled in private exchanges purchased less health coverage- measured in actuarial value-than they had previously purchased.

“This means consumers will be able to personalize their own benefits, but will also have to weigh the options of decreasing monthly premiums versus selecting plans that could yield higher deductibles and out-of-pocket costs,” he explains.“The rise of private exchanges may accelerate changes that are already underway in the health insurance provider landscape."

There is an increased need for consumer education about how to make tough benefit trade-off decisions “because when consumers underestimate the level of coverage needed on private exchanges, it may create coverage gaps that either the consumers themselves or hospitals and health systems end up covering,” Birhanzel says.