On Friday, January 20, the 45th President of the United States of America was sworn into office. That same day, he made the opening move in his campaign promise to repeal Obamacare. President Trump’s Executive Order on the Affordable Care Act (ACA) was largely symbolic, but it sent the intended message that he’s serious about ACA repeal. As a result, people are preparing for a complex new world order … again.
In the coming months and years, there will be major changes to the health care industry, just as there have been every year since the ACA was signed into law fewer than seven years ago. According to the Congressional Budget Office, nearly 18 million could lose their insurance. Costs and premiums, the crux of last year’s policy debates, are only expected to rise more, regardless of which congressional action is taken in the short run. In the midst of the ACA changes, many are left wondering how they will navigate this rocky landscape of new industry shifts.
The truth is, we’ve already been navigating a major shift, one that has provided consumers with much-needed tools to compensate. With digitally-driven, flexible benefits platforms and online tools such as decision-support, consumers are taking control of their own health care – and ultimately, they’ll have the choice to narrate their own benefits story post-election.
Why haven’t you heard of this shift? You probably have, just under a different, not-too-marketing-savvy name: private exchanges. These consumer marketplaces for benefits have been around for decades but saw new life as an all-too-literal antidote to public exchanges. These commercial marketplaces were seen as a consumer-driven way to offer competitive benefits to employers, which make up nearly half of all covered lives in the United States. The prevailing hypothesis was if you provided your employees with a defined contribution, similar to what employers do with 401(k) offerings, and then let them “shop” for more benefit plans, they would get coverage that suited their needs better. Plus, this competitive plan selection also meant employers could end up saving money and having employees that were happier with their benefits, the proverbial win-win. This became the most common premise for private exchanges – competitive marketplaces driven by defined-contribution financial models.
Have they lived up to expectations? Many observers say no. But have they worked? Yes. Here’s how and why.
Private exchanges as a phenomenon have been hurt by outsized expectations, arguably driven by a need for certain, frequently conflicting and competing models of private exchanges, which have caused self-inflicted wounds relating to their viability. Yet, if you peel away the marketing, you get to a more valuable truth – private exchanges advanced an industry in dire need of advancement and provided a modern, digital enrollment experience for consumers in dire need of a new benefits enrollment paradigm. In other words, private exchanges are a tactic; not a strategy unto themselves.
The true value of the rise of private exchanges, which I will heretofore refer to as “consumer-driven digital enrollment,” is how they’ve transformed the way benefits are supplied and consumed. Consumer-driven digital enrollment has caused employers to shift more benefits choice and cost accountability to employees, a move that at its best is working out for both parties. In the best scenarios, information is personalized for employees through data-driven decision-enablement tools that help them make decisions about complex needs based on simplified information and user experiences. Private exchanges advanced consumer-driven digital enrollment in a way that individuals now better understand which benefits are right for them. Or, they are at least pointing them in the right direction – there is still much personalization to be achieved. In a changing health care landscape, this full understanding is what will keep people ahead of what’s to come.
Consumer-driven digital enrollment platforms provide consumers with more “intel” than ever, such as recommendations based on both demographic data and health claims data analysis, so consumers don’t have to pick their benefits as blindly as they did in the paper enrollment or old-school ERP enrollment days. This is a huge advancement for employees eligible for employer-sponsored benefits, 49% of which say making these decisions are “always stressful” due to a lack of understanding. Online benefits enrollment and automation are also essential as more employers and their employees shift to consumer-directed health plans. Such plans leave consumers with a sizable deductible gap that is important to save for, through health savings accounts, and plan for, through supplemental protection, to help guard against unforeseen medical events and their unplanned expense. As health care offerings change faster than consumers can fully grasp them, and as public policy uncertainty continues to swirl, consumer-driven digital enrollment platforms will continue to evolve to accommodate impending changes.
How will this digital transformation of health care play out in the coming year? For one, we’re likely to see a refocus on employer-based care. But if the individual market is redefined under “Trumpcare,” you may see a blurring of lines between individual and employer-based coverage. In fact, we’re already seeing it with the HRA rules updates of the 21st Century Cures Act. Consumer-driven digital enrollment platforms will also be helpful in understanding health care changes to come – their flexibility of configuration and built-in communication tools go a long way in making smarter consumers.
President Trump and congressional Republicans have voiced their support for incorporating more open and expansive Health Savings Account (HSA) strategies, for instance. For consumers to understand these offerings, they’ll turn to digital platforms for education and decision-support. These platforms will also help individuals manage Health Reimbursement Arrangements (HRAs) or any kind of defined contribution with ease and transparency. And if a big change arises, users can navigate the transition with confidence.
No matter how complicated health care benefits become in the coming months, the private exchange movement has laid the groundwork for continued change. This new shift in the way benefits are managed and selected gives the power of transparency, efficiency and choice back to the consumer. If consumers can “shop” for their own health care with confidence, they can navigate the digital health care wave right through whatever rocky shores future holds.
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