How to Navigate Health Care's Move to Private Exchanges


Approximately 170 million people get healthcare through their employers, giving them minimal flexibility in personalizing their benefits. Private health insurance exchanges offer more choice to better meet individual needs. By 2018, it is expected that 40 million people will receive their employer health benefits through a private exchange, which will expand health insurance personalization, and allow employers to control costs/simplify administration. Walgreens, Sears and Petco have already begun providing employee health benefits through private exchanges.

Many employers who use private exchanges use a defined contribution approach, which allows employees to shop for benefit options with a fixed dollar amount in an online market place. Some employees may purchase less health insurance and use some of the remaining allocated funds for auto, pet or home insurance.

However, the flexibility of a private exchange is risky for the employees, as they try to project their own future health threats. Accenture estimates that the level of reimbursement will increase by 7% by 2018, as uncompensated care already amounts to $413 billion since 2000.

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