The buzz created by the opening of the public insurance exchanges has stirred interest in their private-sector counterparts. Whether it will lead to new customers is another matter.
Private health insurance exchanges, some of which have been in business for years, didn't expect to see an immediate, big jump in new business because of the media frenzy around the public exchanges. But, say several private exchange managers, the increased health insurance literacy spawned by the Patient Protection and Affordable Care Act will certainly help them in the long run.
The number of private exchanges has increased of late as major consulting players such as Aon Hewitt, Towers Watson and Mercer have launched or expanded their own and begun to sign on employer clients.
Recommended For You
While the opening for business of the state exchanges technically has little to do with the operation of the private ones, there's still a benefit to the buzz, said Michael Christie, senior vice president at Aon Hewitt, which offers health insurance options for large employers through its exchange.
"Private exchanges have been on the radar of the large employers the last couple of years," Christie said. "What we're seeing in relation to the public exchanges in an increased level of seriousness, of awareness and strategic, thoughtful consideration on the part of non-human resources corporate leadership in the area of benefits."
Christie said the intense media coverage around the public exchanges has increased knowledge about health insurance among C-suite executives who previously showed little interest in the details of their benefits packages. So, while the public exchange openings don't directly translate into new private exchange customers, they are raising the private exchange industry profile.
"These non-HR leaders are now asking about health insurance in terms of strategy," he said. "And as the private exchanges help them make their health insurance costs more predictable, the exchanges are bound to attract more customers."
Elsewhere, HealthPass New York, a private exchange provider catering to small businesses launched in 1999, has seen a large uptick in inquiries as a result of the state exchange launch, said Kevin Keogh, director of health policy.
Keogh said most of the inquiries have come from existing customers who want to know more about their coverage options and whether the PPACA will affect their current plans.
"It's been a crazy, intense week," Keogh said. "This was the moment that everyone's been waiting for. The state exchange opening really effects exchanges overall, because to the consumer, and to many in the media, an exchange is an exchange. They don't always specify whether it's private or public.
"We've had a lot of inquiries are coming in. The buzz is just adding more important and awareness to the exchange bottle. It's like what this whole process has done is add a retail aspect to health insurance that has been missing all along."
Becky Vanderloop, co-owner of SB Merchant Services in Newburgh, N.Y., is typical of the sort of small-business customer who might find her way to a HealthPass-type exchange.
She's been following the public exchange situation closely because she's fed up with her current health plan provider.
"We have a very small business," she said. "We pay partially for some of our employees and some not eligible. For those, we are telling them to go look and see what's there for them on the public exchange. Even the basic plans there look good and seem to offer a lot of coverage."
For her covered employees, she definitely wants a new plan, she said.
"Nothing could be worse than our current plan," she said, "They just deny everything. We want to get new coverage for (her family) and the employees we cover now, and maybe for the others, if it's affordable. If you're paying a lot and getting unreasonable service, why not try something else? My feeling is that my experience will be better with a new provider."
Towers Watson launched its OneExchange – the platform that supports all three of its private exchanges – in January of this year.
It began taking clients this fall; the only one it has announced is Towers Watson itself. Others have signed up but their names haven't yet been released.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.