Accenture told us more than two years ago that the private health insurance exchange market will cover 40 million Americans by 2018.
There are now just three years on the clock, but the consulting company is sticking to its high-flying prediction.
Enrollment in private exchanges has doubled, to 6 million, according to Accenture. That’s impressive. But what’s going to happen to put the growth into overdrive, so another 34 million Americans will be getting their health insurance through private exchanges?
Accenture (and others) point to the 40% ACA excise tax on expensive “Cadillac” health benefits that will take effect in 2018. Rather than pay the tax when they buy group insurance, employers will be motivated to have their employees shop for insurance on private exchanges.
By Accenture’s reckoning, 38% of large employers and 17% of all businesses could get hit by the excise tax.
Although a new development for employees, private health exchanges long have been a well-developed market for retirees. Earlier this year, the Blue Cross and Blue Shield Association (BCBSA) announced creation of the “BCBS Marketplace.” The online portal will allow Medicare beneficiaries to shop for Medigap policies, Part D plans, and Medicare Advantage plans.
The Blues aim to enroll 9 million retirees and are considering rolling out something similar for the commercial population.
The private exchanges are not necessarily a competitor to the public exchanges. Employees cannot take company subsidies into public exchanges, but participation in a private exchange could help them figure out what sort of government subsidies they’d need to participate in a public exchange. Public exchanges might be a better deal for many Americans.
The problem private exchanges face may not be so much in convincing employees that they’re a good idea but in convincing employers. Notwithstanding Accenture’s sunny appraisal, BCBSA research shows that only 11% of employers think the private exchanges will control their health care costs.
Private health exchange annual enrollment
An estimated 6 million members enrolled in private health exchanges for 2015 employer benefits, says Accenture
Calculation includes pre-65 employees and dependents.
Source: Accenture 2015
Most employers are reluctant to move active employees to private exchanges
Share of employers confident that private exchanges will do the following better than employer health plans do today:
The data above reflect the percentage of employers who selected “4” or “5” on a 5-point scale, where 5=very confident. Total survey respondents=136.
Source: National Business Group on Health Large Employers’ Health Plan Design Survey, August 2014
Reasons cited by employers for not adopting private exchange
- Insufficient cost savings to justify disruption
- Waiting for proof of concept
- Evaluating multitude of options