Changes Wrought by Affordable Care Act Lead to Surge in Private Exchanges

BURLINGTON, Mass., Aug. 12, 2014 /PRNewswire/ -- Decision Resources Group finds that interest in private exchanges has sharply increased as the Affordable Care Act has gotten officially underway. These private exchanges come in numerous forms, including multiple or single carrier exchanges, and are marketed to employer groups of varying sizes. Ohio and Tennessee, two states that have received national attention for their respective responses to the requirements of the ACA, have seen increased interest among employer groups in enrolling their lives in health plans through private exchanges and additional private exchanges will likely be launched.

Other key findings from Health Plan Analysis reports: 

• As private exchanges become more prevalent, the number of patients in consumer-driven health plans, including defined contribution benefit plans, will likely increase, which could have a negative effect on pharmaceutical sales, especially for branded drugs.
• The most notable private exchange in Ohio is being launched by Canton-based Employers Health Purchasing Corp., a coalition of large Ohio employers that represents more than 3 million lives. Other business coalitions could be influenced to launch similar initiatives in the future as an alternative to private exchanges offered by companies such as Aon Hewitt.
• Nashville-based employee benefits firm The Crichton Group has launched a private health insurance exchange in Tennessee that is being marketed as an alternative to the state's federally facilitated health insurance exchange. The Crichton Group expects that up to one-fourth of its 1,000 clients will participate in the exchange by the end of 2014.

Comments from Decision Resources Group Analyst AnnJeanette Colwell:

• "Although there has not been mass movement towards these private exchanges, employers are interested in exploring these options. The increased interest in private exchanges provides an opportunity for managed care organizations to gain commercial enrollment, especially if employers begin moving their groups into single carrier exchanges." 
• "Employer groups that shift their workers into exchanges and begin using a defined contribution benefit model should lead to employees being more cost-conscious. Consumers are less likely to choose plans that significantly exceed their employers' contributions, and are apt to choose a high-deductible option that has lower monthly premiums."

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About Decision Resources Group

Decision Resources Group offers best-in-class, high-value information and insights on critical issues within the healthcare industry. DRG insights and analysis on the U.S. managed care market are powered by HealthLeaders-InterStudy. Clients rely on this analysis and data to make informed decisions. Find out more at www.hl-isy.com and www.DecisionResourcesGroup.com.

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SOURCE Decision Resources Group