Numerous efforts are now under way across the health insurance industry to develop alternative health insurance exchanges to the state-based exchanges being developed under the PPACA.
As states grapple with the development of the health insurance exchanges mandated under the PPACA, some insurers are seeing the advantage of implemeting their own exchanges before the launch of stat-based exschanges January 1, 2014. These insurers are seeking a competitive advantage of operating exchanges well in advance of those the states are working to create. The private exchanges will also possess greater flexibility, presumably, than those developed under the federal health care reform law.
The states can either choose to develop their own exchange or can opt for the federal government to take over the role. The decision must be made by states and a report on its exchange development progresss must be delivered to the federal government by January 1, 2013.
Highmark
These developments include Highmark's effort to pilot a private health insurance exchange that targets small businesses with up to 99 employees. Pennsylvania's largest health insurer has partnered with Seattle-based Array Health to run the exchange, which will operate from January to July. Highmark will test the concept and then determine whether to expand the exchange, reports the Pittsburgh Tribune-Review.
Highmark says that Employers using the exchange will provide a monthly fixed-dollar amount for each employee's insurance. Employees can then visit the online exchange to select from seven Highmark health plans.
The exchange includes a product marketplace with tools to compare and explore the plans, plus an administrative section allowing employers and insurance brokers to oversee health benefits. "We believe that if (small businesses) can offer their employees a fixed-dollar amount toward the purchase of insurance, then we can help insure more individuals," said Steven Nelson, Highmark's senior vice president of health services strategy, product and marketing. The plan also aides employers in more effectively using available health financing resources.
Blue Cross
Meanwhile, Blue Cross Blue Shield of Kansas City has introduced its own private exchange available to individuals or small business employees. It allows customers to compare rates of up to 10 different Blue health plans; non-customers can see the plans but not the pricing until they apply and go through the underwriting process, according to The Kansas City Star.
Insurers Team up to Purchase Exchange
WellPoint, Blue Cross Blue Shield of Michigan, and Health Care Service Corporation will be competing directly against state- and federally-run insurance exchanges after buying a majority stake in a private marketplace.
The three insurers purchased a 78 percent stake in Bloom Health, a two-year-old online marketplace that offers health plan options to almost 50 companies, for an undisclosed sum, Bloomberg reports. Bloom Health allows employers to contribute a defined amount per employee toward the cost of health benefits while workers choose their coverage based on various benefit plans, according to the Wall Street Journal.
As the insurance marketplace transforms over the next few years, health plans are increasingly looking for ways to ensure that they are offering employers value and choice they can't get elsewhere. The Bloom Private Exchange Platform does just that, according to its CEO, Abir Sen, prior to the sale.
"We invested in [Bloom Health] because we do feel it will grow quite a bit," Ken Goulet, president and chief executive of WellPoint's commercial business unit, told the WSJ. The insurance companies plan to offer limited exchanged-based services next year and then become fully operational by 2013, one year before health reform-mandated marketplaces open.
