Aetna Inc. execs remain skeptical about how the Patient Protection and Affordable Care Act public exchanges will perform at first.
New and expanded private exchange programs could get off to a faster start, and, in the group market, the success of both kinds of health insurance supermarkets could depend on how much more effective they are than traditional insurance plans at holding down rates.
Mark Bertolini, Aetna’s president, and others made that point today during a conference call with securities analysts. The company held the call to review its second-quarter earnings.
Bertolini said Aetna expects to sell coverage through about 15 private exchanges in 2015.
“We continue to take a cautious approach to participation in the public exchanges as we evaluate the long-term viability of these marketplaces,” Bertolini said.
Aetna will participate in the public exchanges “on a limited basis” in 2014, mainly to get experience with working with them, Bertolini said.
Aetna is hoping the public exchanges will represent an opportunity for growth in the longer term, Bertolini said.
Organizations have been setting up “private exchanges” and similar entities, with names such as “health insurance purchasing cooperatives,” for years, but big commercial insurance brokers have announced plans to ramp up their private exchange efforts in 2014.
Aetna has participated in some of the older private exchange programs, and is now preparing to participate in the new generation of private exchanges.
PPACA seems to have made employers and others more open to trying private exchanges than they were a few years ago, Bertolini said.
Bertolini said some employers could use private exchanges to replace traditional health plans with defined contribution plans, or plans set up in such a way that the employer provides a fixed amount of cash for health benefits each year, rather than agreeing to pay a designated percentage of the premium.
To make the DC health plans a success, an exchange has to offer rates stable enough to keep employees going back to employers with complaints about the programs two years later, Bertolini said.
Because of price stability concerns, many employers are starting off by conducting careful experiments with private exchanges in the coming year, Bertolini said.
“So, I think it’s very early to tell how we’ll look in 2015 or 2016,” Bertolini said.