Commercial health plans are predicting that private health insurance exchanges will win when pitted against public ones for most employer sponsored coverage, according to a report.
Physicians could still be enticed by health plans and other groups operating private exchanges, which would mean that uninsured patients looking for coverage in 2014 will have more choices than state-based exchanges, American Medical News reported Wednesday.
Big insurance companies have invested in private exchange start-ups thinking that they can offer a better insurance marketplace for employers and workers than a public exchange, and will keep private plans dominant in the commercial market.
Insurers are looking at the Massachusetts’ health insurance market as a model because public exchange is already operating there. The state’s exchange is known as the Massachusetts Health Connector has signed up some small groups for coverage compared with individual members. At least one private exchange has said it has done well in the small-group market.
WellPoint, Blue Cross Blue Shield of Michigan and Health Care Service Corp. had all bought an ownership stake in Bloom Health, an exchange host that plans to launch a private exchange available to consumers nationwide, in September 2011.
OptumHealth, a subsidiary of UnitedHealth Group announced in August 2011 that it would buy Commextions, a company based in Orlando working on exchanges including Medicare Advantage exchange for Walgreens.
America’s Health Insurance Plans had hosted a forum in Chicago in mid-November of last year where industry insiders discussed reasons why health insurance giants have been betting on private exchanges. The main reason that was discussed was the sense that government agencies will not be able to convince employers to rush to exchanges as an alternative to the status quo.
"Government is not a good marketer," said Rob Panepinto, managing director for the Client Practice and Exchange Solutions at Connextions, the recent Optum buyout said.