Health IT startup Bloom Health announced Friday that healthcare costs for employers who embraced its private health insurance exchange concept was 19 percent lower than the national average.
A health insurance exchange is analogous to a 401(k) in that employers decide how much money they want to pay for their employees’ health benefits. Then employees use that money to choose the best health plan for their needs from a multitude of health plans offered through a private insurer’s exchange or a public exchange.
Minneapolis-based Bloom Health directly provides this kind of defined contribution solution to more than 75 employers representing 25,000 people. Its software platform also powers private exchanges for several health plans including Medica and Blue Cross Blue Shield of Michigan.
Bloom Health found that while employers’ saw lower healthcare costs through this model of health insurance coverage, their employees found financial benefits, too. Employees’ payroll deductions for healthcare costs were as much as 29 percent lower than the national average.Their premium amounts were lower, too — $4,500, or 18 percent less than the national average, for individuals and$11,700, or 22 percent less than the national average, for families.
“It’s clear to us that the defined contribution approach — whether it’s through a private insurance exchange or a vast market of health plans — is a win-win for both employers and employees,” said Kevin Kickhaefer, Bloom Health’s head of sales and market development, in a news release. “At a time when companies need to remain competitive to attract top talent, while maintaining a sense of predictability when it comes to their healthcare expenses, defined contribution is proving to be an invaluable tool that also reaps rewards for individual employees.”
[Photo Credit: digitalart]
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By Arundhati Parmar
Arundhati Parmar is the Medical Devices Reporter at MedCity News. She has covered medical technology since 2008 and specialized in business journalism since 2001. Parmar has three degrees from three continents - a Bachelor of Arts in English from Jadavpur University, Kolkata, India; a Masters in English Literature from the University of Sydney, Australia and a Masters in Journalism from Northwestern University in Chicago. She has sworn never to enter a classroom again.More posts by Author
How does a health exchange help the health plan if any? Distributed/shared risk?