5 HIX Challenges for Health Insurers

The long-awaited proposed rules for health insurance exchanges were revealed Monday and so far industry reaction has been generally positive.  But health insurers face new business risks and increased competition as they work to figure out how to appeal to the individual and small group market.

HIXs are among the Accountable Care Act's arsenal of cost-cutting weapons. Individual states will create these new marketplaces where almost anyone will be able to compare the prices and benefits of a mix of health plan offerings. The idea is that through exchanges individuals and small employers will enjoy the same cost breaks on healthcare insurance as big employers.

Much of the HIX focus has been on what states will need to do to create and manage exchanges, but a new report says health plans need to get in the game and start planning how they will position themselves to sell their products in what is estimated to be a $60 billion business.

"The exchange is an entirely new market that doesn't exist now," Jeffrey Gitlin, a health industry principal at PricewaterhouseCoopers, explained in a telephone interview. "Payers will need to make some significant changes in the way they do business."

So what are the key considerations for insurers as they prepare for health insurance exchanges? A PwC report, Change the Channel: Health Insurance Exchanges Expand Choice and Competition, offers some insight into what insurers are thinking about as they take the leap into exchanges. The study is based on a nationwide survey of 1,000 consumers and 153 health insurance executives concerning their expectations of exchanges. PwC also conducted in-depth interviews with 35 healthcare industry leaders.