SOURCE: Array Health

Array Health

May 21, 2015 09:00 ET

New Research Underscores Business Value of Private Exchanges and Highlights Health Insurance Complexity and Projections in Employer Settings

Data Points Toward a More Mature Market for Private Exchanges and Measurable Competitive Advantages for Insurers That Offer Them

SEATTLE, WA--(Marketwired - May 21, 2015) - Array Health, a leading provider of private health insurance exchange technology, today released results from a new report, "Health Check: Examining the Business Impacts of Private Health Insurance Exchanges." The survey of 100 health insurance industry stakeholders finds that the functionality and ease of use afforded by private health insurance exchanges is central in helping address employer and consumer uncertainty around benefits options. The data also shows that private health insurance exchanges remove traditional barriers between insurers and consumers and help employers better manage their health insurance offerings.

The results support analyst findings that private exchange adoption will continue to grow, while uncovering the business value private exchanges bring to insurers through a reduction in administrative burden and an increase in market share.

The data also highlights the role that ancillary products play in increasing consumer satisfaction while helping employers attract and retain quality talent.

Key findings include:

  • Insurers that offer single-insurer private exchanges are experiencing significant business benefits. More than half (52 percent) have seen a reduction in administrative costs, while 48 percent have increased their market share. Of those that plan to offer single-insurer private exchanges, more than half (55 percent) expect that a reduction in administrative costs will be among the benefits, followed closely by increased revenue (45 percent) and increased market share (43 percent).
  • Ancillary products are seen as key to a compelling private exchange experience for consumers, yet exchanges are slow to adopt beyond only the most common products. Fifty-nine percent of respondents believe that the availability of ancillary products will lead to an improved consumer shopping and enrollment experience on private exchanges; however, nearly half of respondents (47 percent) indicated that less than a quarter of private exchanges will offer a robust and comprehensive set of ancillary products by 2016.
  • Private exchanges are on their way to becoming the de facto model for employer-sponsored health insurance. Nearly three-quarters of respondents (71 percent) indicated that the majority of health insurers will offer a private single-insurer exchange by the end of 2017, if not sooner, and almost half of respondents (44 percent) indicated that the majority of employers will offer employer-sponsored health benefits via a private exchange within that same time frame.
  • Defined contribution has a PR problem. Of the possible benefits of defined contribution -- among them more choices for employees as well as opportunities for cost savings -- an overwhelming majority (86 percent) pointed to better cost predictability as a reason for adopting. However, 69 percent of respondents indicated that a barrier to employer adoption of the model was fear that it would be negatively perceived by employees.
  • Brokered sales continue to remain strong despite widespread access to private exchanges and online tools. Seventy-five percent of insurer respondents indicated that they would use brokers for the sale of plans with a start date of January 1, 2016 -- not far behind direct sales (79 percent) and on par with public exchanges (75 percent), and slightly ahead of single-insurer private exchanges (67 percent).

"The health insurance landscape is undergoing a period of unprecedented transformation," said Jonathan Rickert, CEO of Array Health. "New consumer engagement models and expectations have created a mandate for insurers to make the process of selecting and enrolling in health insurance easier and more efficient. The data clearly shows that private exchanges play an important role in helping insurers meet this new business imperative and thrive in the market."

About the Survey
One hundred subscribers to Atlantic Information Services (AIS) and Healthcare Payer News (HPN) took the online survey, which ran for two weeks in April 2015. View the full survey results here.

Array Health
Array Health brings consumers and insurers closer together by powering a personalized health insurance experience. Its cloud-based e-commerce software platform enables health insurers to deliver their own branded online exchange -- including e-commerce support throughout the value chain of brokers, employers and consumers, across all lines of business. The company's technology gives employers a new way to control costs and personalizes the health insurance experience for consumers, enabling them to make more informed decisions and to more deeply engage in their health. Array Health is a privately held company based in Seattle. To learn more, visit arrayhealth.com.

Contact Information

  • For Array Health
    Collin Roberts
    Edelman
    (206) 664-7839
    Email Contact