Exchanges Part 1: Everyone wants in

September 4, 2012

Why have exchanges? … What is an exchange? What isn’t?: A Two-Part Blog Series on Health Care Insurance Exchanges

By Brian Bohlig, chief marketing officer
Extend Health – A Towers Watson company

You wouldn’t call it a stock exchange if only one company was selling shares on it, right? It’s easy to see how that kind of a market would benefit the company selling on it – buy my product and forget the rest.

But how does that help consumers?

As a corporate or government employer or professional/trade association, you should be asking this question if you want to offer employees /members – present or retired – health care coverage through an exchange.

What you find when you look under the hood of some of exchanges might surprise you, because some models aren’t set to drive all the value and savings organizations and consumers  aspire to when making the transition from a group health insurance plan to the individual market.

Why an exchange?

The reason for exchanges in the first place is to help get a handle on an industry known for its complexity and high costs. A nimble exchange has the potential to slice through health care and insurance industry complexity and costs with:

  • Apples to apples comparisons – Putting comparable plans from different carriers beside one another so consumers can make sense of the benefit differences.
  • Transparency – Showing pricing, not just of medical plans but also helping assess out-of-pocket costs consumers could see down the road based on prescription medication needs, the kinds of doctors they see and where.
  • Objectivity – A system that doesn’t promote certain plans for non-consumer-oriented reasons, like commissions, or for the administrative ease of the exchange itself.
  • Cost-savings – By making it easy to compare plans side by side, it creates a competitive environment where consumers can pick the least expensive plan that meets their needs best.

Extend Health has been running an exchange for eight years. In 2005, when the Medicare Modernization Act did for Medicare insurance plans what health care reform is doing for everyone else now, we set up the first real private Medicare exchange  – an exchange that gave retired employees of our employer clients access to the individual Medicare plan market – an exchange that moved beyond the one-size fits all structure of employer group plans. We enrolled retirees from our first employer, Chrysler, in 2006.

Today we offer the largest number of carriers – over 75 and counting, serve the largest number of employer clients – over 175 (40+ Fortune 500s) and counting, and the largest number of consumers who have selected individual Medicare plans through our exchange – over 200,000 and counting.

Since Extend Health became a Towers Watson company back in May and the Supreme Court ruling upholding health care reform, many clients, retiree, reporters and others in the health care industry have been asking us about exchanges and what to expect.

At this pivotal point in the evolution of health care in our nation, Extend Health is in a unique position. Features of the Medicare environment, like guaranteed issue and standardized plans, are being applied to the rest of the U.S. health care environment. And we have deep, long-standing measures and knowledge about how consumers, employers and carriers have fared on the Extend Health exchange.

In the next post of this series, I share what experience has taught us about what to look for and what to ask when you’re considering an exchange.

For regular commentary on developments and trends in health care, insurance, and technology, follow @brycewatch  and @ExtendHealth on Twitter and check out http://www.extendhealth.com.

Related articles

Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare insurance exchange.

3 Responses to “Exchanges Part 1: Everyone wants in”

  1. […] Exchanges Part 1: Everyone wants in (extendhealth.wordpress.com) […]

  2. […] Read part one in this two part series: Exchanges Part 1: Everyone wants in […]

  3. […] Exchanges Part 1: Everyone wants in, Extend Health blog […]

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