Choosing health insurance coverage and effectively using the health care system can be a daunting and confusing experience for consumers.

Many don't understand basic health insurance concepts, including plan design provisions, carrier provider networks, or when to select a high deductible plan with a health savings account.

Consumers often have many choices, and research shows that they frequently make mistakes and pay more than they need to. In the words of one of our clients, "Our associates understood the concept of being good consumers, but they weren't of the mindset that they needed to be good health consumers."

Despite the challenges that exist in the U.S. health care system, offering quality health coverage remains an important part of the recruiting and retention value proposition for employers.

But they are looking for new and innovative ways to change the way health benefits are offered. Specifically, employers are shifting more accountability to employees and helping them change their behaviors in ways that lower the risk of rising health care costs and financial volatility. Private exchanges serve as a great example of new innovations in the market that are helping to drive this paradigm shift in employee accountability.

While private health exchanges are still relatively new, they are showing promising results in helping to engage employees in a way the industry has never seen before. Through decision support and consumer friendly tools, private health exchanges have increased health literacy among employees and are converting them into smarter health consumers.

While many employees enthusiastically adopt a consumer mindset in selecting their plans, it is important to equip them with the right enrollment resources to strike a balance between choice and simplicity so they can feel confident they found the right plan for them. Many private exchanges have shopping experiences that mirror those found on popular retail sites and leverage the tenants of online shopping toolsthey are simple to use and provide fast, clear results.

But to be effective, these tools must be personalized to the individual, using demographic, geographic, enrollment and dependent data, as well as claims information, risk tolerance insight and preferences around doctors and prescriptions.

A well-designed private exchange should offer consumer friendly tools that make it easy for employees to match their needs and budget to the right plans. These tools could include:

Personalized guidance: Consumers are provided with guidance to help them find a plan that is the best fit for them based on their preferences and risk tolerance levels. It needs to narrow down choices and take into consideration their demographic and geographic information, claims data from the previous year, risk profile, preferences on doctors, and how their prescriptions are covered by the plans formulary.
Carrier consumer ratings: Consumers should be encouraged to provide feedback, similar to other consumer sites like Amazon, on how well they think their insurance carrier has performed on a number of functions, including network offering, customer services and claims processing. These ratings should be available to all consumers when they are shopping for new coverage.
Interactive shopping experience: Consumers need to quickly sort and filter their choices in multiple ways, including by coverage type (high deductible plans, PPO plans), price, carrier or plan features. They should see how each plan covers their prescriptions and whether certain carriers have their doctors in the network.
Pre-enrollment modeling: Consumers should have the ability to research their options prior to annual enrollment. They can educate themselves on the cost components of each plan, understand the tradeoffs between plan premiums, deductibles and out-of-pocket costs, and comparison shop between plans available to them.
Carrier education: Consumers should be able to “shop” carriers and understand what unique services and features would be available to them if they enrolled with that carrier. Some items may include free gym memberships or transparency tools on provider quality and costs, appointment scheduling, pharmacy and lab finders that may all be available via mobile apps. These can be important to their satisfaction and ability to behave like health care consumers.

A well-designed private health exchange can change how people choose their benefits, engage with their providers and use the health care system. Employers participating in these exchanges see their employees fully engaged in their health care choices and how they are becoming empowered and informed health care consumers. So while the industry is still evolving, we are at the forefront of a consumer-centric movement with personalized tools, technology and resources enabling individuals to better navigating the health landscape.

Instant Insights /

Private exchanges: rise of the informed health care consumer

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