BCBSIL Announces New Private Exchange

SamIam

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Got this email this morning, so what does this mean?

Health Care Service Corporation (HCSC), which operates Blue Cross and Blue Shield of Illinois (BCBSIL), announced today an agreement that will establish a nationwide private exchange for employers to use in managing their health benefit offerings.
HCSC has joined WellPoint, Inc. and Blue Cross and Blue Shield of Michigan (BCBSM) in purchasing equal stakes in Minneapolis-based Bloom Health, an emerging leader in the defined contribution health benefits marketplace. The Bloom private exchange brings an innovative solution and cutting edge technology for the defined contribution model on a national level. With new offerings such as this private exchange, BCBSIL will be well positioned to help employers and individuals navigate the changing health care market.
With this purchase, we will immediately cover 19 states, with the goal of developing this into a 50-state solution in the near future.
BCBSIL will begin offering limited enrollment for groups renewing in the first quarter of 2012 and will be fully operational for all markets by 2013. We welcome clients to explore this option in addition to BCBSIL’s traditional offerings.
The Bloom private exchange brings an innovative solution and cutting edge technology for the defined contribution model on a national level, which will complement our strong relationships with brokers and consultants.
We are constantly assessing ways to prepare for the future and we’re sure our competitors are doing the same. It is important that we take a leadership position in proactively developing a private exchange solution now, to remain ahead of our competitors.
In our case, purchasing Bloom Health will allow us to further expand our ability to compete in an ever-changing marketplace. We will continue improving access, choice and flexibility and positively impact the evolving generations of solutions to manage health care costs. The use of other defined-contribution, consumer-directed health plans have been growing for years, including Health Reimbursement Accounts, Health Savings Accounts and the like.
Through its private exchange platform, Bloom Health helps employers define and manage their health benefits spending through a defined contribution model. The employer contributes a defined amount per employee toward the cost of employee health care benefits. Employees and individuals are presented with a wide selection of benefit plans through an online “marketplace” to best fit their needs.
We also see this solution being successful in the individual marketplace as an extension or connection to our current products for individuals going forward. The tool allows them to select a plan based either on the level of benefits they need or the amount of money they have to spend.
WellPoint and HCSC are the number one and number two market share leaders, respectively, in the individual market space across the country. The terms of this arrangement allow each of us to enhance the health care solutions we offer our customers while allowing flexibility for our unique business needs. By joining forces, we will be able to retain this position and work to grow in the over-65 market.
The concept of an exchange model began a little over five years ago in the group retiree market as a way to facilitate the transition of group retirees into the open retail market, which offers Medicare Supplement, Medicare Advantage and Part D Prescription Drug program offerings. Some companies maintained retiree coverage by instituting caps on employer costs and shifting liability for future increases to retirees. As retiree contributions escalated, the market responded by offering private exchanges to Medicare-eligible employees, providing a mechanism for employers to subsidize coverage while lowering administrative costs. The marketplace is now evolving beyond just retirees into actives, COBRA participants and individuals.
Your BCBSIL account representative can address questions you have about this new acquisition. For more information on Bloom Health and to watch a demonstration of their defined contribution model platform, go to
 
It's much like my State Health Exchanges website, a private venture who is moving foward, with or without the government, on rebuilding the existing marketplace and branding it under with the new "label" determined by congress called a "health exchange"
 
It's much like my State Health Exchanges website, a private venture who is moving foward, with or without the government, on rebuilding the existing marketplace and branding it under with the new "label" determined by congress called a "health exchange"

When I read this I immediately thought about all the state health exchanges that will have to be made before the feds create it's own exchange, maybe this is their response to that mandate?
 
Bloom has set up a defined contribution approach.

So this will start off as an employer option on a private exchange.
The way it will work is the employer decided the what the defined contribution is going to be for each employee.

Then the employee will have a huge amount of plans to choose from. They will have the option to take a risk assessment very similar to e-health. At the point of completion 3 plans will be suggested to the employee.

There should be 3 tiers of risk factors.

The employer contribution will be administered through an HRA.

This will be huge in the fully insured group market.

UHC has already launched this type of plan and no one can compete against it and that is why I think Wellpoint bought bloom.

Wellpoint is very broker friendly so this could be a good thing.
 
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