Lending some relief to this problem, exchanges, or insurance marketplaces have helped change the landscape and alleviate the challenge for retirees who wish to consult and enroll in Medicare supplementary plans. In several cases, these exchanges can benefit both parties involved. Employers appreciate fewer administrative issues and a higher predictability of costs, while retirees may benefit from a wider range of carriers and plans to choose from at more competitive rates.

This exchange model was developed years ago to aid retirees who were left liable for their own health care contributions after employers began shifting costs. By contracting with an exchange, an employer may subsidize costs by offering a fixed dollar amount toward coverage, while also allowing the individual control to select their own package and pricing. These private insurance exchanges generally receive revenue through commissions or fees, and counselors are typically salaried; however they may receive sales incentives.

Pros and cons

With most insurance exchanges, Medicare eligible seniors have the option to work with a counselor to sift through the array of coverage options including Medicare Advantage plans, prescription drug plans and Medigap.  This personal assistance can help ease the transition from employer aid to private health insurance.  

Many times an employer may offer a couple options from a single carrier, none of which match the retiree's exact needs.  Retirees may benefit from the array of competitive options; selecting the plan that best fits their individual needs and budget. The marketplace is also evolving beyond just retirees. In 2014, an exchange will be set up in every state to give consumers and small businesses the option of selecting coverage from plans that have met the benchmark of quality and affordability.

Blue Cross Blue Shield of Texas is just one of many providers hoping to adapt and compete in the changing health marketplace. In an effort to prepare for the future and take a leadership position in exchange solutions, BCBSTX is establishing a private exchange for employers to use in managing health benefit offerings. Other carriers taking part include UnitedHealthcare, Cigna and more.

The question still remains whether the coverage model available through exchanges is equivalent to what employers were offering previously. With so many options, the process can become overwhelming or confusing to retirees who are unfamiliar with insurance jargon and pricing.

Even in the upcoming presidential election, health reform and Medicare specifically remain a central topic of debate. Nevertheless, it is an encouraging sign that the health care system recognizes issues such as the shrinking retiree health benefit and is working to create cost-effective and user-friendly solutions that better provide for the needs of retirees and other consumers alike.