Many pundits believe health care reform (PPACA) will fundamentally change the health insurance landscape. They are calling for a shift away from employer-based coverage to individually purchased benefit plans…the retailization of health care.
Over the years, I have been involved with a number of health plans that were launching and/or growing their Under-65 individual health insurance product-lines. Now, with the advent of health care reform, there is increased interest in understanding the role of online sales channels. New selling models called exchanges (public and private) or via a health plan’s own website are giving insights into the online purchaser.
Health insurance exchanges are an organized, structured online marketplace (aka, a shopping mall) for individuals to access, shop and purchase health insurance. The exchange objective is to deliver consumers information that supports their buying decision, provide a choice of benefit plans, promote price competition among health plans participating on the exchange, and facilitate easy enrollment after a plan selection is made.
Recently, eHealth, one of the nation’s leading sources for the online purchase of health insurance for individuals (i.e., a private exchange that acts as a health insurance agent), released the results of their online shopping survey, The National Survey of Individual and Family Health Insurance Shopping at eHealth Insurance.
We’re seeing three common themes among health plans we’ve been working with: 1) build a profitable membership base, 2) increase consumer demographic and purchasing insights; and 3) develop more advanced direct-to-consumer marketing and retention capabilities. From that perspective, the eHealth survey provided several valuable insights:
The majority of individual market buyers are employed. According to the research, only 24% are self employed while the others are part of an employer that don’t provide adequate coverage or, the employee is anticipating leaving the employer coverage plan. Understanding the employer’s options and preferences for ceding benefit decisions to the exchanges and employees themselves will likely drive this number higher.
Women continue to drive healthcare and economic family decisions. Similar to other consumer businesses, women seem to control the household budget. According to eHealth, 65% of all online shopping is done by women.
Reasons for shopping for individual coverage. By far, two reasons dominated the survey’s results for why individuals enter into the shopping cycle: looking for a better deal or their current coverage has ended and they need new coverage quickly.
Marketers need to understand the shopping and buying habits of prospects and their buying channel preferences. The internet has quickly become the dominant shopping channel for individual health insurance coverage. However, don’t forget the importance of integrating other channels (broker, direct mail, telesales, etc.) that help educate and drive traffic online to complete the transaction. Understanding who buys what and when via which sales channel, their risk profile, and ultimately their LifeTime Value is a key ingredient to creating a winning go-to-market strategy now, and in the post-reform era that’s quickly approaching.
To view the eHealth survey, click here.