Public Exchanges, Private Exchanges – Friends? Enemies? Frenemies?

The growth of both public exchanges and private exchanges in the past few years has been quite remarkable.  For the sake of definitions, public exchanges include federal and state based exchanges established by the Affordable Care Act. Private exchanges, in this blog post, will be used to cover large, benefit consulting exchanges that serve the enterprise employer space (think 5000 employees and above).

While working at a state-based exchange, I recall attending an information session held by a large consultant private exchange organization.  The folks from the consulting firm seemed surprised by my attendance and asked why a fella from a public exchange was there.

Considering the fact that these public exchanges serve very large employers while public exchanges serve individuals and small businesses (currently defined as 50 Full Time Equivalents -FTEs- or less), I didn’t quite see why my attendance was being called into question. Can’t a health care geek get his geek on by attending an evening session to learn about private exchanges?

[The answer is yes, but you have to read to the bottom to find out why…]

Of course, that was more than a few years ago.  The landscape has changed. The view of both private and public exchanges has changed.  Private exchanges continue to grow leaps and bounds.  Public exchanges seem to be getting their legs under them after struggling mightily for a few years.  And you know what else has changed?  The ability for public and private partnerships to demonstrate that they can work.

Consider this – any benefits broker or consultant worth their salt knows that solutions for active, full time employees is good for their employer clients. But what about other employees like pre-65 retirees and part-time employees?  Hint: solutions that provide services for those “other” employees are ALSO good for employers.

It just so happens that private exchanges can fill a gap here.  Forward thinking folks identified this gap and have pursued collaboration and cooperation with both the federal public exchange and a number of state-based public exchanges. In fact, when I was working for a state-based exchange, I set up a collaboration with two of the large private exchanges that involved warm-transfers from their exchange to the state exchange to facilitate enrollment.

What does this mean?  For an employer with full time, part time, and pre-65 retirees, it means a one-stop shop for them.  These employers use the private exchange as a solution for all of their populations. Since the private exchange has a partnership – typically through a vendor partner – with the public exchange – voila.  One-stop shop.

Oh, and that private exchange story I shared above – the one that questioned my attendance because I was working for a public exchange?  I now work for them.