Winning on the Health Insurance Exchanges

Healthcare reform and the Affordable Care Act are about to send a flood of newly insured individuals into the market. The implementation of the law—and particularly the opening of state healthcare exchanges will set in motion a great migration of American consumers toward a new model of insurance. We anticipate that eventually nearly half of the commercial market (80 to 100 million people) will obtain their health insurance in the form of individually purchased coverage. This market will be fundamentally different from the employer-oriented market that dominates healthcare today. Transparency will fuel fierce price competition. Regulatory scrutiny will be intense. The risk adjustment system mandated by ACA will alter companies’ approach to the marketplace—while creating new demands and complexities. As distribution shifts toward individuals, there will be a new premium on innovation and savvy, cost-effective marketing.