Private HIX Pose Challenge to Public Health Insurance Exchanges
A recent study from Accenture predicts that although enrollment will start slowly—with one estimated million enrollees in 2014—and trail public HIX for several years, private HIX enrollment will catch up by 2017 and even exceed public HIX enrollment by 10 million members in 2018.
There are two private HIX models: single-carrier and multi-carrier. The single carrier is probably the most familiar. The employer selects the carrier, say Aetna or Cigna, and the employee selects from among the benefit plans offered by that carrier. The multi-carrier model allows an employee to select from among several carriers and benefit plans.
Participating in a private HIX provides something of a win-win for insurers and employers. Both have been looking for ways to extract themselves from the annual uncertainty of renewing healthcare benefit contracts. The way that typically plays out is the company CFO waits each year for the insurance quote. Then the CFO has to decide if the company should shop around for a better deal or take other steps—increasing deductibles and copays—to lower costs.
"That's just not much of a strategy," says Austin Madison, vice president of group benefits at The Crichton Group, a Nashville-based insurance broker. The firm will launch its own private HIX on Oct. 1. Blue Cross Blue Shield of Tennessee has signed on to offer seven plans. Aetna and Cigna are expected to join by Jan. 1.
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