Health exchanges or health insurance marketplaces are set up to facilitate health plan purchase according to the Patient Protection and Affordable Care Act (known as Obamacare in the United State of America). This marketplace provides standardized and most importantly government-regulated health plans. The health insurance exchange market (HIX) is gaining steady growth with changed federal health insurance mandates, changing healthcare costs, and changing trends of integrated environments. Businesses in the industry are aiming at healthy growth, thanks to the increasing funding from the authoritative bodies. Along with the existing businesses, many potential players are also interested in investing money in the industry.
Segmentation in HIX Market
The health insurance exchange market is segmented based on various essential components in the industry, which mainly include the types of products, phases, components, kinds of end users, and demand from different geographic regions. The types are segmented into two basic portions as, public exchange and private exchange. Both these segments are divided further into different sub-segments. Following are the details of the sub-segmentation in the health insurance marketplaces market:
- Public Exchange: State based, federally facilitated (FFE), and state partnership model
- Private Exchange: Multi-carrier and single-carrier exchange
- Components: Software, hardware and services
- Geography: United States of America, Asia, and rest of the world
- End User: Third party administrators, consultancies, brokerage firms, government bodies, health plans and payers
- Phases: Pre-implementation, implementation/exchange infrastructure delivery, program management and independent verification and validation, quality assurance, operations and maintenance
Forecasts to 2018
According to the latest market research reports, the health insurance exchange market is expected to grow at an anticipated CAGR of over 10% to reach $2.6 billion by the end of the year 2018. The global industry is strongly driven by various factors like health insurance mandates released by federal government, drive to reduce healthcare costs, growth in federal funding, defined contribution model, growth in the rate of adoption for healthcare IT solutions, rising adoption of integrated environment, etc. The industry growth is mainly attributed to the private exchanges, and other applications like operations and maintenance activities. The research also shows that cloud-based computing is showing great prospects of growth in the global HIX market.
The global health insurance exchange market is dominated by United States of America, which carries around 95% of the total market shares. The European market has a small share in the global industry, which is not expected to grow, owing to the economic crisis in the region, lack of initiatives and cultural barriers. Both Asia Pacific and rest of the world regions lack significant share on global scale.