What Is a Private Health Insurance Exchange?

The launch of the Affordable Care Act (ACA) six years ago introduced the concept of a public health insurance exchange to many employers and consumers. But the fact of the matter is, private exchanges have been around for more than two decades. The CaliforniaChoice private health exchange was launched in the 1990s by health insurance industry veterans John Word and Rusty Brown.

Through their growing expertise in the small group health market, the Word & Brown General Agency co-founders realized many of the challenges with managed health care could be attributed to a lack of choice in health insurance plan offerings. Only a single managed-care plan was generally offered to small group employers, and many employees felt they were being forced into coverage that did not address their personal needs.

In 1994, Word and Brown began developing an employee-choice health purchasing alliance, which was modeled after large group and government employee plans that delivered multiple health insurance coverage options under one program. After two years in development, CaliforniaChoice was approved by the California Department of Corporations and became the first private, multi-plan health insurance program available to small groups in the state.

Word & Brown Innovators

For their innovative thinking and ability to turn their dream into a successful reality, John Word and Rusty Brown were named Orange County “Entrepreneurs of the Year” in 2001 by Ernst & Young. The following year, CaliforniaChoice was recognized with the prestigious Innovators Award from the Health Insurance Association of America.

CaliforniaChoice Growth

Through the years, CaliforniaChoice has grown to become an authority on employee-choice health care and the state’s leading health program for businesses with up to 100 employees. The private exchange offers employers a better way to control their health care costs through Defined Contribution, while expanding coverage options for employees and dependents and delivering streamlined administration.

Coverage is currently available through eight leading health plans and insurers: Aetna, Anthem Blue Cross, Health Net, Kaiser Permanente, Sharp Health Plan, Sutter Health Plus, UnitedHealthcare, and Western Health Advantage. Private health insurance exchanges today are attracting more members than ever before. Growth hit eight million nationwide during the first half of 2016, up by more than one-third (35 percent) from 2015.

At CaliforniaChoice, small group membership is also up – with 2016 service to more than 17,700 employers and nearly 320,000 employees and dependents. If you’d like to learn more about CaliforniaChoice, contact your employee benefits broker. Or, if you don’t have a broker, we’ll help you find a broker to speak with about your employees’ health insurance needs.