direct primary care

More Signs Employer Health Exchanges Lower Costs

Another batch of companies that turned to a new concept of giving their workers money to buy health benefits via private online marketplaces known as exchanges are seeing lower health care costs.

Employee benefits consultancy Mercer says companies that moved to its marketplace saved “an average of $800 per employee.” About one-third of that amount, or $250, was passed along to employees, according to Mercer, a subsidiary of subsidiary ofMarsh & McLennan MMC +0.78% Companies (MMC).
There are 67 pioneering employers with more than 280,000 employees, retirees and family members selecting benefits in the so-called “Mercer Marketplace.” Participating companies this year include Petco (PETC) and Kinder Morgan KMI -0.92% (KMI).

“Private exchanges are generating interest among employers of all sizes,” said Sharon Cunninghis, senior partner and global Mercer Marketplace leader. “Mercer’s research shows that one-fourth of US employers are considering switching to a private exchange in just two years, while 45 percent would consider moving to an exchange in five years.”
The news of lower costs for companies using Mercer’s exchange comes the same month rival benefits consultancy Aon AON +0.35% Hewitt (AON) said the average cost increase in “fully insured” premiums from three companies using its exchange, the Aon Hewitt Corporate Health Exchange, was 5.1 percent. By comparison, average cost increases for large U.S. employers are projected to be between 6 and 7 percent in 2014, according to Aon Hewitt’s annual cost trend data report.

The exchanges launched by benefit firms are about to get some competition as insurance companies like Aetna AET +1.05% (AET), Cigna (CI), Humana (HUM) UnitedHealth Group (UNH) develop their own private exchanges.
The exchanges work like those that are operational by states or the federal government under the Affordable Care Act in that they offer consumers more choices plus people who buy coverage are empowered to make choices for their individual needs, benefits consultants say.

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About Concierge Medicine Journal

Concierge Medicine Journal (CMJ) curates breaking concierge medicine news, and editorial opinion on a wide variety of topics relevant to the practice of Concierge Medicine.

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