Based on early experience managing a private health insurance exchange for employees, Aon Hewitt reported Thursday that its employer clients probably saved between 1 and 2 percent on health insurance costs by choosing the private exchange option.
The company based its assertion on a post-enrollment survey of employees and families who get their coverage through the exchange. An independent third party conducted the survey, Aon Hewitt said.
"The average cost increase in fully insured premiums for these companies returning to the private exchange in 2014 was 5.1 percent, including the reinsurance fees levied on all group health plans under the Affordable Care Act," Aon Hewitt said in a news release. "Comparatively … average health care cost increases for large U.S. employers are likely to be approximately 6 percent to 7 percent in 2014, before employers make changes in deductibles and copays."
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More than 600,000 employees and dependents enrolled in health plans via Aon Hewitt's exchange during the 2014 enrollment period last fall, the company said.
"Nearly 75 percent of enrollees felt confident they chose the health plan that offered the best value for them and their family, and 87 percent liked being able to choose among multiple carriers," the company reported.
In general, the plans that employees chose in 2013 worked for them, the survey results indicated. Employees can choose from four levels of plans, each with a metallic nomenclature. More than 80 percent of employees stayed in the same metallic level in 2014 that they were in in 2013. Of the 19 percent who selected a new plan, 12 percent chose a less expensive plan, 7 percent selected a richer one.
The range of choices clearly appealed to these individuals:
- 42 percent picked a moderately-priced silver plan, "which was closest to what they had before enrolling in the private exchange," Aon Hewitt said.
- 31 percent picked a bronze-level plan, "choosing leaner coverage in exchange for lower deductions."
- 17 percent picked a richer gold plan.
- 10 percent went straight to the most expensive platinum plan.
How did they make their choices?
- 32 percent based it on price.
- 23 percent said choosing a plan similar to their previous plan drove the decision.
- Almost one in five chose the plan that offered, in their view, the best level of medical benefits.
How did they choose an insurer?
- 36 percent picked the low-cost option.
- 25 percent chose a carrier because they'd had a good experience with them previously.
- 22 percent chose a carrier based on the match between their doctor and the insurance company's network.
- 15 percent switched insurers in the second year, but only 2 percent said it was because their doctor left the insurer's network.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
