MINNEAPOLIS – As all eyes focus on the efforts of states to get their mandated health insurance exchanges up and running, Bloom Health entered the fray in July with the launch of two “private” exchanges serving individual health plans and their members.

 

The Bloom Private Exchange Platform builds on the company’s existing online marketplace that allows employees to purchase their own health insurance under their employer’s defined contribution benefit plan. The launch of the new platform signals a trend of insurance plans wanting to meet employers’ growing use of defined contribution health benefits.

 

"We've heard from health plans that they need a way to offer more customized, individually-tailored benefits to their employer clients who are looking for more choices in a tough economy," said Abir Sen, CEO of Bloom Health. "As the insurance marketplace transforms over the next few years, health plans are increasingly looking for ways to ensure that they are offering employers value and choice they can't get elsewhere.  The Bloom Private Exchange Platform does just that."

 

Bloom’s initial customers for the platform are Blue Cross Blue Shield of Michigan and Medica, which has more than 1.6 million members. These two contracts alone could markedly increase the number of people using Bloom’s technology to price and select health insurance, as the company currently serves roughly 50 employers comprising 25,000 workers.

 

For Medica, using the Bloom platform is a vital aid for a new health insurance product it launched this month called My Plan. Available to groups with 51 employees or more, the plan seeks to attract employers that want to offer defined contributions to their employees – a set dollar amount per month or year – which can be used to help pay for the cost of health insurance. Using the Bloom platform employees can compare plans based on price and benefits and choose their own insurance based on this information.

 

"Employers want their benefits programs to truly help attract, motivate and retain the best workforce possible," said Simeon Schindelman, Medica senior vice president of commercial markets. "Bloom's Private Exchange Platform gives us the opportunity to do this for employers with our new defined contribution product."

 

In published reports, Sen has likened the Bloom offering as akin to travel websites Expedia or Travelocity. In the case of Medica, employees can enter personal information that will winnow roughly 20 choices into the two or three best insurance choices for each individual.

 

When it is time for an employee to select their plan, the site shows exactly how much the employer will contribute to paying for the plan, as well as what the exact cost will be to the employee.

 

The idea, advocates say, is to bring employees on board with employers to help them better understand the overall costs of health insurance and to allow employees to become more focused consumers in the healthcare marketplace.

 

"It goes back to the hypothesis that people spend their own money differently than when they spend other people's money," Sen told the Minneapolis StarTribune in a recent interview. "They're becoming smarter shoppers of care. Anecdotally, some of our employers are saying people are starting to pay more attention to preventive care and those sorts of things because now they're more on the hook for their own health. It's early yet, but it's very encouraging."