NEW YORK, Sept. 11, 2014 /PRNewswire/ -- PwC's Health Research Institute (HRI) today released a new report – The Rise of Retail Health Coverage – detailing how retail health insurance marketplaces, known as exchanges, are dramatically changing both the employer benefits environment and the health insurance business. According to HRI, employers faced with rising costs and regulatory demands are moving away from the benefit business, pushing individual consumers to take on new responsibility for their own health insurance. This will fuel significant growth of health exchanges over the next decade in the new health economy.
Health exchanges have existed for years in various forms, but the launch of the Affordable Care Act's public exchanges and the emergence of several new private exchanges have broadened awareness of the concept. HRI's report notes that while the public exchanges have already enrolled eight million in the first year and are poised to grow rapidly over the next few years, the shift to retail-style private exchanges may be a longer process.
According to HRI, exchanges may be most attractive to employers looking to shift healthcare decision-making to their employees. Employers with fewer than 50 full-time employees will have the option of sending workers to the public exchanges without penalty, while for some companies, private exchanges may offer more affordable insurance than they could obtain on their own. According to PwC's 2014 Touchstone survey of 1,200 employers, 32 percent of employers are considering moving their active employees to a private exchange in the next three years. In addition to alleviating administrative burden, the move to a private exchange presents additional benefits that would otherwise require too much time and money for many employers to implement on their own, such as integrated wellness programs, online benefit sites and consumer decision support.
"Employers are expressing significant interest in private exchanges, but taking the time to evaluate the various exchange offerings," said Barbara Gniewek, principal, PwC's Human Resource Services practice. "We are watching very closely as the market continues to evolve. Exchanges that can deliver sustainable cost savings, and enhance the customer experience while reducing the administrative burden will be best positioned for success."
HRI's report outlines implications for employers, insurers, and providers, as well as new entrants and pharmaceutical and life sciences companies. "The push to retail means more transparency on pricing, products and services," said Kelly Barnes, PwC's U.S. Health Industries leader. "In today's new health economy, healthcare companies will need to find innovative ways to demonstrate value and quality to their customers."
About PwC's Health Research Institute (HRI)
PwC's Health Research Institute (www.pwc.com/hri) provides new intelligence, perspectives, and analysis on trends affecting all health-related industries. The Health Research Institute helps executive decision makers navigate change through primary research and collaborative exchange. Our views are shaped by a network of professionals with executive and day-to-day experience in the health industry. HRI research is independent and not sponsored by businesses, government, or other institutions.
About PwC's Health Industries Group
PwC's Health Industries Group (www.pwc.com/us/healthindustries) is a leading advisor to public and private organizations across the health industries, including healthcare providers, pharmaceuticals, health and life sciences, payers, employers, academic institutions and non-health organizations with significant presence in the health market. Follow PwC Health Industries at @PwCHealth.
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SOURCE PwC US