The venture capital arm of Bain Capital — the private equity company that Mitt Romney started — helped round up $12.6 million in financing for Liazon Corp. in April 2011.
Liazon is a private exchange company — a company that offers employers a vehicle for offering a long menu of benefits options from many different carriers, rather than a choice of just a few health plans.
Ashok Subramanian, the chief executive officer (CEO) of Liazon, and Alan Cohen, the chief strategy officer, who has worked for companies such as Cigna, do not immediately mention the Bain Capital connection, let alone the friend-of-a-friend connection with Romney.
But they are clearly hoping, like others in the health insurance exchange infrastructure market, that the “train has left the station” when it comes to exchanges, and that exchanges will be coming an increasingly important part of the U.S. health insurance market no matter who is in the White House in 2013, and no matter what happens to the Patient Protection and Affordable Care Act of 2010 (PPACA).
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The executives came to the Hoboken, N.J., offices of LifeHealthPro.com today to talk about their vision of the future of private exchanges.
When Liazon started marketing the private exchange concept to employers, and to insurers, five years ago, Subramanian had to lobby hard to get the insurance company executives to consider the idea of offering their products alongside products from other insurers.
In the past two weeks, Subramanian said, three carriers have come to Liazon and suggested that Liazon should offer their products through a multi-carrier exchange.
Because of the PPACA public exchange provisions, “each of the health plans is going to have to learn to live in this new world,” Cohen said.
The shift should create great opportunities both for exchange companies like Liazon and for the health insurance agents and brokers who market the exchanges, Cohen said.
Many people are working hard through many channels to whack PPACA.
If the law takes effect as written and works as drafters expect, the PPACA public exchanges are supposed to create “one stop shopping” for individuals and small groups that are using new federal tax credit subsidies.
Despite suggestions that state and federal regulators have been slow to set up the exchanges, Cohen said he believes that five to 10 states will have public exchange programs functioning a from now, and that the U.S. Department of Health and Human Services (HHS) will succeed at providing exchange services for residents who have no access to state-created exchanges.
The public exchanges should be great for the companies and individuals that qualify for the PPACA subsidies, but only some individuals and companies will qualify for the subsidies, and many companies will be shut out of using the small business exchanges at first.