(Bloomberg) — To limit the rising cost of health care, U.S. companies are increasingly turning to private insurance exchanges that let employees shop for plans, according to research from Accenture P.L.C. (NYSE:ACN).
About 6 million people got health insurance coverage via such online portals this year, up from 3 million in 2014, the consulting firm said Tuesday. Accenture expects that to jump to 40 million people, or about a quarter of those who get insurance at work, in 2018.
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The shift may place more of the financial burden of health care on workers, though it can save employers money and may bolster earnings at benefits consultants like Towers Watson & Co. (NYSE:TW) and Aon P.L.C. (NYSE:AON). Towers Watson gets about 10 percent of its sales by operating the online portals for its clients, and exchange revenue grew the fastest among the company's major business lines in the final three months of last year.
"It's clearly the way health care is heading," Jean Moore, a managing director at Towers Watson, said by phone.
While privately run insurance exchanges are separate from the marketplaces operated by the U.S. government and some states under Obamacare, the same principle applies: individuals choose from a variety of plans with different premiums, copays, deductibles and coverage options. About 11.7 million people enrolled in government-run marketplaces this year.
Employers can benefit from switching to a private exchange because they can set aside a fixed amount of money that workers use to pick an insurance option from companies like UnitedHealth Group Inc., Aetna Inc. or Cigna Corp., among others. While that could be good for relatively healthy employees who can choose cheaper plans, it can also mean that other workers are left covering more of the costs out of pocket.
Cost control?
While private exchanges help employers limit what they pay for health benefits, it's not yet clear whether they help keep health-care costs under control, said Rich Birhanzel, managing director for Accenture Health Administration Services. If they don't, workers could be responsible for an increasing share of their health-care costs over time.
So far, midsized companies have been the main users of private exchanges, Birhanzel said. He said he expects larger employers to increasingly use the portals as well, especially in preparation for a federal levy on high-cost health plans, dubbed the Cadillac Tax.
That 40 percent tax on costly health benefits, part of the Affordable Care Act, starts in 2018. It'll initially hit family plans where premiums exceed $27,500 and individual plans costing at least $10,200.
