The Affordable Care Act has opened a floodgate of controversy, discussion and debate--as well as opportunity-- on the topic of public and private exchanges. Though state and federal exchanges are still in a period of uncertainty and have made their biggest impact in the individual market, private exchanges have been successfully running for years and are considered by many to offer a more comprehensive value proposition.
Defined contribution and cost management currently dominate the discourse around private exchanges. Fixed costs, reduced administration and greater choice for employees and their families are clearly a structural advantage. This is not only an advantage to the consumer, but we at OneDigital believe that there are also longer-term advantages of private exchanges. The emphasis of the discussion should be about future innovation that aligns the needs and incentives of each individual with the best solution. This will be a requirement for employers and providers alike.
By definition, employer benefits decisions revolve around group needs rather than the individual. Current provider networks tend to be wide, and plan choice is usually modest. Many employers, if given the choice, would rather not be solely responsible for choosing plans, provider networks and financing strategies that cannot possibly meet the different needs of a diverse employee population.
A private marketplace offers a solution where employees can buy health and other benefits that suit their individual lifestyle, financial and risk tolerance and changing needs. The trend is to move to benefit customization at the individual level and shift responsibility for product choice and financing tradeoffs from employers to employees. The problem is most people are generally unprepared and lack the knowledge to make these decisions. This is where innovation, education and engagement come into play. Employees, families and individuals must learn how to become better health care consumers.
At the consumer level, we expect product configuration to be transformational. There will be shifts in provider networks from being regionally based (as they are currently for employers) to community based. Plan design and pricing dynamics will also shift from a wholesale to a retail experience. Wellness and lifestyle solutions, costs and quality transparency tools and insurance financing solutions will evolve more quickly and freely. Consumers will have more ability to demand and affect change than employers do under the current system. It’s likely they will make very different choices than employers, and, in so doing, will affect change to the health care delivery system.
OneDigital has a long history of innovation. We pride ourselves on being ahead of the curve for the benefit of our customers. Establishing a proprietary private exchange, OneDigital Marketplace, for our small to medium size business customers serves as an example of that commitment. We are able to leverage our national scale and scope to bring this solution to businesses which generally do not have this option. We seek to educate employees and families through their employer and will continue to innovate to help them become better health care consumers.