Key findings from PwC's research include:

• Fifty-two percent of health insurance executives said their companies plan to compete in the individual or small group exchanges, and nearly one-third are considering it but are still undecided. Seventeen percent of insurers do not intend to participate.
• Of those insurance executives who said they plan to participate in exchanges, 37 percent are not active in the individual market today and 20 percent do not offer small group policies.
• Insurers' No. 1 concern is the impact of adverse selection on their business if they receive a disproportionate number of high-risk patients. The second biggest concern is the ability to integrate technology with the exchanges.
• On average, insurers expect it will take approximately 15 months to get their businesses ready for exchange certification by the federal government. Forty percent expect it to take 18 months, and 20 percent believe it will between two and two and a half years before they are ready.

"Health insurance exchanges will be one of the most market-changing aspects in the Patient Protection and Affordable Care Act," said Jeff Gitlin, U.S. healthcare payer practice principal at PwC in a statement. "Insurers will need to shift from a wholesale approach to more of a retail way of interacting with consumers and compete in ways they never have before to earn consumers' business and loyalty."

The report also outlines the key considerations for insurers as they gear up for participation in health insurance exchanges, including the impact of various exchange models on their business. Each state has flexibility in how to design and operate an exchange, which could mean a wide variety in exchange models across the country. According to PwC, these differences could make some exchanges profitable for some insurers but not for others, and insurers will need to decide which ones they will enter.

The survey found that most insurers are hoping that states will opt for an open market model, where any insurer can sell policies on the exchange as long as certain minimum requirements are met. Active purchaser models, where the state evaluates and selects insurers in a competitive bidding process, were only preferred by 10 percent of insurance executives. The open market model is used in Utah, while the active purchaser model was adopted in 2006 by Massachusetts.

Once the exchanges open in 2014, it's anticipated that the vast majority (97 percent) of participants will be individuals who do not currently have health insurance. As a result, PwC reports that insurers will face major consumer education and communication struggles.

Key findings from the consumer study echoed the need for education and communication:

• Thirty-seven percent of upper income respondents ranked benefits as their most important consideration and 23 percent ranked price, whereas 43 percent of those with lower incomes (Medicaid eligible) ranked price as most important and 23 percent ranked benefits highest.
• Three-fourths of consumers said that insurers need to be clearer about what they are selling, particularly about what is and is not covered. Forty-three percent said they would like a tool that estimates prices for common procedures and 37 percent want a way to easily compare insurance products.  
• Fifty-three percent of respondents say they would not be willing to pay a higher price for any additional health insurance feature, such as dental coverage, choice of doctors or vision coverage.
• Consumers aged 18 to 34 years are three times as likely as consumers over 45 to be willing to give up their choice of doctor for a lower health insurance cost.
• Sixty-one percent of consumers said they think health insurers should offer rewards, such as discounts or gift cards for healthy behavior. Offering rewards was cited as a top loyalty driver, although nearly one-third would forego the reward in exchange for lower cost insurance.
• Current Medicaid recipients are six times more likely than current commercial consumers to prefer companies that offer social services assistance such as transportation to and from the doctor, and those with middle incomes are more than twice as likely to feel the same.  

Another thing that will change under the new exchanges is the role of health insurance agents and brokers. Insurance executives surveyed by PwC said they anticipated a 20 percent decrease in broker-directed sales once the exchanges opened. Instead, more sales will be made directly to the consumers via online channels. 

Instead of disappearing completely, however, executives believe the role of the broker will change to one of education and guidance. Forty-six percent of consumers said it would be easier to shop for insurance if they had someone to talk to at the insurance company. Since buying insurance is a complex process, this is an excellent opportunity for brokers to step into an advisory position; rather than negotiating premiums for exchanges, they can serve as educators to guide consumers through the sale, PwC said.