As AHPs go live, health insurance exchanges roll on
The future of the Affordable Care Act exchanges and the appeal of private health exchanges continue to be topics of conversation within the health insurance brokerage community. There are many questions in the market about what’s ahead for health insurance exchanges — such as whether or not the federal government will continue to fund public exchange subsidies, or if carrier access will decline for 2019. In spite of all of the talk, the good news for employers, consumers and brokers is the future for exchanges remains bright.
In the fall of 2017, President Trump signed an executive order allowing for the formation of new association health plans (AHPs), where small businesses could band together to obtain health insurance for employees at a (presumably) lower cost. The caveat is that coverage available through these member associations is not required to follow ACA compliance guidelines, specifically when it comes to covering essential health benefits such as mental health services, maternity care, prescription drugs and more.
With cost savings a key driver behind employer health insurance purchasing decisions, it is possible some employers will move their employees’ health insurance to new association coverage. However, few small groups have taken advantage of these benefits, which mainly target healthier individuals with no pre-existing conditions. Time will tell if more associations announce plans in coming months to establish new health insurance options for members and broaden their appeal for small businesses.
Right now, public and private exchanges remain resilient when compared to AHPs. Carriers that previously pulled out of state-run and federal exchanges several years ago are now rejoining the fold. This is mainly due to increased competition, which demonstrates the continued stabilization of the health insurance marketplace. For example, Anthem recently announced it is re-entering the Virginia marketplace with lower premiums, in time for the upcoming 2019 open enrollment period.
Brokers with access to health insurance exchanges remain in a strong position to offer small group clients benefit plan designs that meet a variety of employee needs. The return of carriers to the exchange marketplace continues to support the increasing demand for choice from employers and employees alike, while also creating more aggressively priced options for small businesses.
The consumerization of healthcare, coupled with the advent of the era of the smartphone and tablet, establish an environment where there is an expectation that shopping for insurance should be similar to an online retail experience.
Exchanges, particularly specialized multicarrier platforms, provide brokers and their small group clients with the ability to compare and contrast many different health plan designs at several price points — all customized to each employee’s individual or family needs. This is especially appealing to employers with a multigenerational workforce in different life stages with varying healthcare requirements.
It remains to be seen whether market forces and association health coverage will broadly affect individual and small group health insurance exchanges. In the meantime, multicarrier exchanges will continue to provide an increasing number of small group employers with the cost control they want and the customized benefit plan designs that employees have come to expect.
Exchanges are here to stay.