For health insurers and health care service plans, state health benefit exchanges represent a major business opportunity that will generate an estimated $205 billion in premiums by 2021, according to a report issued this month by PwC’s Health Research Institute.
“Public exchanges will create an irreversible shift in the insurance market that will ultimately change the way medical care is sold in the U.S.,” the report notes. It adds the caveat that managing this large new cohort of covered lives poses challenges. “Insurers will continue their battle to keep a balance of healthy and sick members to limit adverse selection. Providers and insurers will face clear challenges in serving a new customer base with a demographic profile and health needs that differ from today’s insured population in meaningful ways.”
In addition, many of the newly covered will churn between Medicaid and commercial coverage sold in the state exchanges as their incomes and life circumstances change. The full report, Health Insurance Exchanges: Long on options, short on time, can be downloaded here. (Registration required)
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