Private health insurance exchanges gain momentum

21 May 2014 | Dave Meyers, Microsoft Director of Business Development, HHS

Awareness of health insurance exchanges has increased dramatically in the US with the advent of the Affordable Care Act and the utilization of public exchanges for shopping and enrolling into healthcare coverage.

Another trend, Private health insurance exchanges are top of mind for employers, health plans, and health benefits consultants alike these days.

As many employers turn to defined contribution strategies to control their employee benefits costs, private exchanges offer a convenient way to implement those strategies. With private exchanges, employers can provide a benefits marketplace where their employees use defined contribution dollars to choose their health insurance plan from a variety of participating payers. According to a recent poll by the Healthcare Trends Institute, the top two perceived benefits of private exchanges that employers cited were: to help employees make more cost-conscious benefit decisions and to offer a wider array of options for benefit plans. Accenture predicts that private exchanges purchasing will surpass insurance spending by 2017 and therefore, approximately 18% of the American public will purchase insurance through private exchanges.

To meet employers’ demand for private exchanges, health benefits consultants such as Towers Watson are investing significantly in private exchange solutions. In the past two years, Towers Watson has spent US$650 million acquiring Extend Health and Liazon to help the company expand private exchange offerings for its clients.

And, of course, health insurance companies want to make sure that their plans are available to consumers on as many exchanges as possible—whether public or private.

So there are many factors driving the surge of interest in private exchanges. At the same time, today’s technologies are incredibly well-suited to enable these consumer marketplaces for health insurance.

With the flexibility of cloud services—or a hybrid approach of cloud services and on-premises solutions—companies can get private exchange services up and running quickly and adapt them as necessary based on organizational and consumer requirements. The cloud also provides the scalability needed for fluctuations in consumer use of exchanges. For example, cloud services can scale up to meet a spike in demand during open enrollment and scale back down during the rest of the year. And today’s mobile devices make it easy for consumers to access exchanges from anywhere.

While private exchanges are a hot topic right now, they’ve been around for more than a decade. And many of our partners have been helping employers, health plans, and health benefits consultants with their exchanges over the years. Our partners are also behind many of the public exchanges for states.

In other words, Microsoft partners have deep experience using proven technologies to build both private and public exchanges. And you can benefit from their hard-earned knowledge to help you with your private exchange strategy in our upcoming webinar on May 29 entitled Get What It Takes: Finding the Right Partner for your Carrier-Driven Exchange Strategy.”

Don Garlitz, Executive Director of Exchange Solutions at bswift; Dan Schuyler, Senior Director at Leavitt Partners; and Matt Graham, Project Manager at Leavitt Partners; will join Microsoft for a webinar discussion that highlights key technology and consulting solutions that you can engage to get your health insurance exchange plans off the ground.

We hope to connect with you on May 29. For details and to register, please visit the webinar page.

And if you can’t make the webinar, please feel free to reach out to us with questions or to share your health insurance exchange experiences. Send us an email or let us know on Facebook or via Twitter.

Dave Meyers
Microsoft Director of Business Development, HHS

Microsoft in Health Blog

About the Author

Dave Meyers | Microsoft Director of Business Development, HHS

Dave Meyers is the Director of Business Development for Health and Human Services in the Health and Life Sciences group at Microsoft. Dave began his career at Microsoft in 1997 and is focused on the technical strategy, design and implementation of the... Read more