With 6 million people enrolling in their benefits on a private health insurance, the market has seen annual growth in excess of 100% since 2013, and forecasts don't show the trend slowing, according Accenture.
With 6 million people enrolling in their benefits on a private health insurance, the market has seen annual growth in excess of 100% since 2013, and forecasts don’t show the trend slowing, according Accenture.
By 2018, 40 million enrollees will have gained insurance through a private exchange with the mid-size employer segment (100-2500 employees) driving the initial growth. Plus, 2 factors that were initially limiting growth of private health insurance exchange—capacity constraints and lagging adoption by large employers—are expected to no longer be an issue in the future.
With new entrants into the market, consolidation, investments, and organic growth, capacity constraints will erode over time. In addition, data from the initial wave of private exchange launches as well as actions being taken to address concerns, may be the proof needed by large employers to adopt a private insurance exchange.
“We remain optimistic that several factors will catalyze enrollment growth in private health insurance exchanges through 2018,” Rich Birhanzel, managing director for Accenture Health Administration Services, said in a statement. “This is especially true as the market matures, employers gain more control of benefit design, and evidence continues mounting on the tangible benefits of the model.”
In addition to the removal of some constraints that were slowing private health insurance exchange adoption, Accenture is seeing several accelerators, such as: the employer mandate; the Cadillac Tax, which places a 40% excise tax on high-cost plans; and increasing demand for more choice and flexibility.
Accenture also found that despite initial concerns, many employers did not drop coverage in 2015. The researchers reported that most employees view health insurance as a critical benefit provided by their employer with 76% of consumers saying health insurance is the primary or an important factor for continuing to work at their current employer. As a result, employers find it difficult to drop or defund health coverage, and as a result the private exchange model has become a favorite, according to the report.
“Employers’ drive to meet consumer expectations, spurred on by key accelerators, will lead to 40 million members on private exchanges by 2018,” Mr Birhanzel, Scott Brown, and Joshua Tauber wrote in the report.