What has been the largest source of cost savings with private health insurance exchanges?

The largest source of cost savings with private health insurance exchanges has been primarily attributed to employees choosing less generous plans. This shift occurs as employees are given the opportunity to select from a range of insurance options, which allows for more cost-effective choices than traditional plans. When individuals are empowered to make their own selections, many opt for plans that better align with their financial situations or personal health needs, which often means selecting plans with lower premiums and higher deductibles or less comprehensive coverage.

This behavior leads to substantial savings for employers, as the overall costs associated with providing healthcare benefits can decrease when employees select less costly insurance options. Moreover, the competitive environment created by multiple plan offerings encourages insurers to keep premiums in check, thereby enhancing the potential for savings.

While other options like the transition to a defined contribution approach, increased use of technology, and better health education of employees can contribute to cost management and efficiency, they have not shown the same level of impact on direct cost savings as the trend of employees opting for less generous plans. These alternatives often improve the delivery of care or increase employee engagement in their health choices, but the immediate savings seen with private health exchanges predominantly stem from the selection of lower-cost insurance options by consumers.