Aetna CEO: Public, Private Exchanges Are Future Of Health Care

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FARMINGTON — Aetna Chairman and CEO Mark T. Bertolini said Thursday that the steep rate of medical inflation is changing the heath insurance marketplace from a business-to-business model to a retail market shared by private as well as public exchanges.

Bertolini, speaking at the annual economic conference sponsored by the Tunxis Community College Foundation, said the ever-escalating cost of medical services and health insurance has led employers to shift more of the price of health insurance onto workers. Soon, he said, the average worker will be paying more than 50 percent of employer-based health plans.

He referred to a graphic showing a 90 percent increase in health insurance premiums from 2000 to 2011, mirroring the rate of inflation in underlying medical costs — everything from doctors and hospitals to biotech and pharmaceuticals. During that same period, he said, wages increased only 33 percent.

That’s a shift from business-to-business to a retail marketplace, Bertolini said.

“I know a lot of employers are looking at, ‘Should I put my employee in the private or public exchange?” Bertolini said. “Should I give them the money to go buy their own health care and let them make their choices?”

Bertolini’s comments echo findings last year by J.D. Power and Associates that 47 percent of 6,579 surveyed employers across the U.S. said they “definitely will” or “probably will” switch their health insurance offerings to a “defined contribution” model within a private exchange. A defined contribution is when the employer gives workers money to buy whichever health insurance they want.

The future of health care is public and private exchanges, Bertolini said. Rather than people buying one of a few options offered through their employer, the employer will give the workers money to buy on a private exchange.

Private exchanges are already a part of the health care market. Some companies, such as Walgreen Co., Sears Holding Corp. and Darden Restaurants Inc., are already in private exchanges, which offer a wider buffet of health plans than the usual two to four options of ordinary employer-based coverage.

“We are the largest public exchange participant in the country,” Bertolini said.

Aetna is the low-cost option in many of those markets, though Aetna does not offer health plans on the public exchange in Connecticut.

These exchanges are new marketplaces. Private exchanges will be different from the public health exchanges that are a part of the Affordable Care Act, which offer federal subsidies to offset part of the cost of premiums for anyone making up to 400 percent of the federal poverty level.

“Public exchanges and private exchanges, which are emerging quicker than public exchanges, are going to be the place in the future where people will go to buy their health care much like they buy their airline -tickets, their hotels for travel,” Bertolini said.


About Matthew Sturdevant

Full-time staff journalist at The Hartford Courant and magazine freelancer with a master's degree in writing from Dartmouth. My work has appeared in The Los Angeles Times, The Chicago Tribune, Taiwan News, The Baltimore Sun and many other news sources. My blog has been referenced by, the Kaiser Family Foundation, the Georgetown Law Library and a number of organizations in healthcare and business. Sturdevant’s blog is "a well-written wealth of ideas," said The Donald W. Reynolds National Center for Business Journalism, (, May 18, 2011). I have experience writing for newspapers, magazines, Web sites and blogs as well as shooting and editing video. I made regular appearances on news-talk radio and on the NBC affiliate station in Corpus Christi, Texas. I made occasional appearances on the Fox affiliate in Connecticut promoting Hartford Courant articles.

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