Just as government marketplaces are transforming their individual policy businesses, Blue Cross and Blue Shield companies are setting up private exchanges to save a far larger source of traditional revenue.
Blue Cross and Blue Shield of North Carolina is the latest to introduce a private exchange, a new option for employers with more than 50 workers. Employees will have a selection of four different health plans, with the organization setting a monthly, annual or per paycheck contribution.
"Employers are moving away from the one-size-fits-all model of health insurance," said Steve Crist, BCBSNC vice president of group market sales, in a media release. "They recognize that someone 26 and single has different coverage needs than someone who is 48, married and has kids."
BCBSNC's new exchange follows in the model of single carrier private exchanges created by other Blues and large insurers, including Cigna, which is also selling in multi-carrier iterations.
Back In 2011, Health Care Services Corp. -- parent of Blue Cross and Blue Shield companies in Illinois, Montana, New Mexico, Oklahoma and Texas -- partnered with WellPoint and Blue Cross and Blue Shield of Michigan to share technology resources in the joint purchase of Bloom Health, a Minneapolis-based company that makes private exchange and employee benefits software.
Including Blues plans in 19 states, that project was launched with the goal of eventually operating in 50 states. HCSC started offering limited enrollment in 2012 and extended it to group clients marketwide last year. BCBSM launched its exchange, branded as GlidePath, as a pilot in 2011 and has since made it available statewide.
Employer participation in private exchanges is on the rise. About three millions Americans are currently getting health insurance in employer-contribution exchanges, and some 40 million could be doing the same by 2018, sccording to the consulting firm Accenture. Private exchanges "have an unprecedented opportunity to differentiate and prove the value of this new model over traditional self-managed plans," said Accenture managing director Rich Birhanzel.
Insurers sponsoring their own exchanges are hoping they can retain their place in the group market and perhaps also grow their business.
Exchanges like Blue Cross and Blue Shield of North Carolina's are hoping to offer members more benefit and cost-sharing options and also attract younger sections of the workforce that might prefer to buy into plans with lower deductibles and high premiums.
The company says it will offer a guide for employees, asking them a series of questions about their health history and utilization and recommending plans based on those answers.