The N.C. Chamber, the state’s powerful business lobby, is setting up a private statewide insurance exchange to sell health policies to people whose employers drop health coverage for their workers.
It’s a first for North Carolina and is scheduled to go public next week, offering a glimpse into the nation’s emerging insurance landscape. It will be one of a number similar private exchanges being prepared in about 18 states, said Jim Simpson, chief operating officer of the N.C. Chamber.
Chamber officials expect a significant healthcare shift in which companies stop offering insurance in a move to manage healthcare costs. Instead, employers will opt to pay workers a cash allowance so they can shop for their own policies.
The shift is expected to spread among small employers across the country; larger businesses, meanwhile, will be required to provide insurance under the nation’s healthcare law, the Affordable Care Act.
The Chamber’s exchange is designed to function much like the federal insurance exchange, www.healthcare.gov, that was launched Oct. 1 to sell subsidized policies to the uninsured. But the Chamber’s version will not offer federally subsidized insurance, and many of those who shop on the private exchange will be employees accustomed to workplace coverage who will be purchasing an individual insurance policy for the first time.
“The employee will have a heck of a lot more choice in what they actually need,” Simpson said. “This will be an option where they can get a full-suite package.”
Private insurance exchanges have recently been introduced by IBM, Time Warner and other large corporations as a means of providing supplemental Medicare coverage to retirees. Private exchanges make it easier to compare prices because they include policies from multiple insurers on one website.
Such exchanges are sometimes greeted with skepticism because companies use them to control runaway healthcare costs. But many also prefer the wider range of options than workplace coverage, which typically involves a single insurer.
“My only concern is consumer confusion,” said Adam Linker, a policy analyst with the N.C. Justice Center in Raleigh. “I don’t think it’s a bad thing as long as people aren’t confused about the fact that there’s only one federal exchange where you can get your subsidy.”
The Chamber will offer its private exchange through CieloStar, a nationwide health benefits technology company. The private exchange will offer at least three insurers, including the state’s biggest, Blue Cross Blue Shield.
CieloChoice will offer health, dental, vision, Medicare supplemental and other types of policies. The policies can be purchased from multiple insures but will be bundled on one bill, Simpson said.
With regard to learning about insurance policies, the other options for insurance shoppers who lose coverage at the office will be talking to an insurance agent or navigating websites of insurance companies that sell policies here. Some independent agents, however, represent only one insurer.
Simpson said the Chamber’s private exchange will also receive a “small royalty” for every policy sold through the exchange. He expects many other private exchanges to become available in North Carolina — some created by insurance companies, insurance agents and other organizations — but not all providing information about all available insurance options.
The number of private exchanges will reflect the number of employees who lose workplace coverage and are forced to buy their own policies.
“The potential pool is huge,” Simpson said.