The health insurance shopping experience may be changing for some who are used to getting health coverage through work. It’s an increasingly popular choice especially among larger companies with lots of part-time employees.
Walgreens, Sears and the parent company of Olive Garden all are directing some of their workers to a “private health exchange.”
The process begins when a company sets aside money a “defined contribution” for workers to use as they shop for coverage.
“They maybe say: ‘We will provide you with $500 per month’ — or whatever the amount is, give them a shopping experience and the employee can go online and choose from a variety of plans and a variety of carriers,” said Linda Taylor, chief sales executive for Independence Blue Cross.
In Philadelphia, Independence, the region’s biggest health insurance company, is offering health plans on the country’s largest private exchange — operated by AON Hewitt. Which raises the question: What local companies are sending their workers to marketplace to shop?
So far, Independence isn’t saying; neither is AON.
Benefits for employers, workers
In a time of fluctuating costs, companies love the certainty of knowing exactly what their “defined contribution” to health care expenses will be.
Taylor said a private insurance exchange offers employees more choices — maybe six or seven health plans versus two or three — and more opportunities to find coverage that meets their needs.
A couple with no kids is often looking for very different coverage than a family of five with three small children. Those differences matter when employees sit down to pick a plan, Taylor said.
“What’s your family’s usual experience, what do you anticipate is going to happen next year?” Taylor said. “Saying, OK, this is what I need, coverage for my kids to go to the pediatrician and that’s very important to me.”
Skeptics of “corporate” or “private” health exchanges say workers “let loose” to shop may be overwhelmed by the options.
Changing habits on health care
John Turner, CEO of Corporate Synergies, says giving workers more plan options isn’t nearly enough to drive down health costs. Health care expenses begin to fall, and workers spend less out-of-pocket, when they use their coverage differently, he said.
Turner’s Burlington County, N.J., company is launching its own private insurance exchange — and looking for clients to sign on.
“You have to now educate that employee base, we have to make them better consumers,” Turner said. “Where the rubber meets the road in all of this is ‘How do I use it?’ That’s where the cost containment really comes in.”
Turner says Corporate Synergies will email reminders and text employees to help them change how they use health care.
The company is also planning a 1-800 hotline — Turner calls it a “listening post” — to answer questions and resolve issues. “I’m having trouble getting a claim paid, I have a question on a co-pay, I need to find a doctor,” Turner said by way of example.
When an anxious parent is considering rushing an ill child to the emergency room, Turner said someone will answer the call.
“We can say: ‘There’s a couple other options for you,'” Turner said.
That may include directing parents to an urgent care clinic five miles down the road and helping them avoid a costly co-payment at the ER.
Going over the options
It’s easy to get confused, but a private health exchange is different from the Obamacare marketplaces— available through the Healthcare.gov site — you’ve heard so much about this week.
Turner said Corporate Synergies’ core business is helping more than 450 clients manage their benefits plans. He’s had lots of discussions, he said, about his clients’ options in the “new world of health care reform.”
“Not one of them have talked about not offering health insurance to their employees,” Turner said. “They do find it critical for building their business.”
“What they are looking to do is spend dollars wisely,” he said. “A private exchange solution is not saying: Go fend for yourself.”
Disclosure: Independence Blue Cross supports some programming at WHYY.