Here is some good news for anyone overwhelmed by the prospect of choosing the right health insurance plan: today’s health insurance exchanges are making the decision-making process simple and more transparent. Exchanges are online marketplaces that offer plans at a variety of price points from one or more insurance companies. Exchanges typically also include some guidance for the consumer, making it easier to compare plans and find the best fit. There are two types of exchanges in the news lately: public exchanges and private exchanges.
What’s the difference between a public and private exchange?
Public health exchanges were created to provide greater access to health insurance as part of the Affordable Care Act. There are two kinds of public exchanges, one for individuals and one for small groups. Under the individual exchange, some people may qualify for subsidies or cost-sharing reductions.
Private health exchanges come in different shapes and sizes, but are generally added to an employer’s benefit enrollment process. Some are offered directly by insurers to employers and their employees; these are called proprietary exchanges. Some are offered by third parties such as consulting firms and insurance brokers, and can be single or multi-carrier (meaning coverage could be offered from one insurance provider or several). Private exchanges help simplify administration and make it easier for small- to mid-sized employers to offer more benefit choices to employees.
When a private exchange is available, employees typically will have a wider range of choices for health plans and related benefits such as dental, vision and life insurance. After enrolling, participants will typically have access to consumer-friendly tools to help manage their health.
How do they work?
People who use online travel sites to book a hotel or flight, or shopping sites to compare prices and quality before they buy, will find a familiar experience. High quality private exchanges recommend plans based on an individual’s lifestyle and offer consumer-friendly tools that help people compare costs and benefits, and check whether their doctors and preferred hospitals are in the plan’s network.
Aetna offers plans to employers on approximately 20 third-party private exchanges. The company also offers its own proprietary private exchange solutions for small, mid-sized and large employers, along with single and multi-carrier options for retirees. In addition, the company “white labels” exchanges for brokerage firms, trade associations and other organizations. For example, Aetna is the architect of the newly enhanced multi-carrier Retiree Health Access program offered by HR Policy Association, for large employers and their retirees. Most recently, Aetna worked with Sam’s Club to offer a private exchange for small businesses.
Editor’s Note: On November 25, Aetna announced it has acquired bswift, a health insurance exchange technology and benefits services provider whose technology platform offers a retail shopping experience for public and private health insurance exchanges and employers nationwide. Aetna intends to use the bswift capabilities to build the next generation of its private exchange offerings.