A push by some employers to move their worker health coverage to private exchanges may benefit managed care stocks, according to Citigroup.
Walgreen Co., the nation's largest drugstore chain, said last week that it will move its coverage to a private insurance exchange run by the benefits consultant Aon Hewitt. The switch will give workers as many as 25 plans to choose from instead of two to four options provided by their employer.
This approach, called defined contribution health insurance, involves giving employees a set amount of money and then letting them pick their own coverage through a private marketplace or exchange that helps them sort out the choices. It can give workers more coverage options and make health care expenses more predictable for employers, many of whom have struggled with spiraling costs for years.
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