FIVE KEYS TO CAPTURING SHARE IN THE EMERGING INDIVIDUAL INSURANCE MARKETPLACE. by Kristin Irving, Eric Freshour and Tricia Anklan

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1 FIVE KEYS TO CAPTURING SHARE IN THE EMERGING INDIVIDUAL INSURANCE by Kristin Irving, Eric Freshour and Tricia Anklan

2 Health insurance has historically been a group-based product. Currently, the vast majority of insured Americans receive coverage through their employers. While individual health insurance products do exist, the marketplace is opaque and expensive and provides limited consumer protection services. This paradigm is changing, however. By establishing health insurance exchanges (HIX), the Affordable Care Act (ACA) creates a publicly regulated marketplace for individual health and dental insurance products. Provisions such as essential health benefits, guaranteed issue, underwriting restrictions, plan benefit/cost transparency requirements, limitations on out-of-pocket expenses, and plan subsidies increase the attractiveness of the individual health insurance marketplace. In fact, the Congressional Budget Office (CBO) anticipates million people will participate in exchanges by Additionally, as the cost of health insurance rises, employers (both large and small) may look to eliminate health insurance as a benefit, thus pushing additional individuals into exchange marketplaces.

3 MOST PAYERS ARE NOT PREPARED TO ADDRESS GROWTH IN THE INDIVIDUAL MARKET Currently, only 9 percent of covered Americans access health insurance through individual plans. That number is even lower 1.5 percent when we look at covered Americans accessing dental insurance. Most payers do not offer an individual insurance product, and those that do think of it as a low priority, preferring to spend their time and money on group business. As a result, payers are unfamiliar with what it takes to attract, sell to, and service individual customers. To capture individual market share effectively, payers must shift their thinking from a business-to-business (B2B) model to a business-to-consumer (B2C) model. Following are five keys to making a successful shift. HIX READINESS AND INTEGRATION To effectively capture share in the newly created HIX marketplace, organizations must review state (for all states in which they intend to sell their product) and federal guidelines as they relate to healthcare reform, HIX, and insurance plans. Powered by this knowledge, a readiness strategy and gap assessment can help payer organizations understand and address key people, process, and technology considerations prior to the open enrollment period (October 2013). Organizations that address these gaps and develop an informed perspective on HIX integration will be able to systematically establish links between HIX and internal claim platform(s) and processes. This will allow communication of plan data, financial transaction information, and eligibility with minimal administrative costs.

4 E-COMMERCE PLATFORM One of the first steps in shifting to the B2C model is implementing tools that make it easier and more convenient for potential customers to purchase health and dental insurance online. While e-commerce technology has been in place for the past 20 years, the health insurance industry has been slow to make changes to its sales engine (preferring to drive sales through brokers). A robust e-commerce website provides a platform from which insurers can directly interact with potential customers and also supports the entire sales lifecycle. Providing a mechanism to compare/shop for/purchase products, an effective e-commerce platform also: Builds brand awareness Educates the potential member about available options and the benefits of health and dental insurance Drives optimal conversion rates Predicts customer needs and is flexible to respond to recent trends Provides a customer-centric experience Aligns business processes to support the customer Integrates data to provide a comprehensive channel for the customer and his/her objectives INTEGRATED MARKETING STRATEGY It is critical for an organization to dedicate time and resources toward developing a comprehensive marketing strategy that encapsulates both traditional 1 and digital 2 channels. Organizations should consider developing user personas and journey maps to provide a high-level characterization of key member segments and define different touch points with which customers interact when engaging the brand. As a result, organizations will be able to prioritize marketing channels, allocate budget, and design campaigns effectively. SELF-SERVICE CHANNELS The individual consumer marketplace expects robust self-service options. An accessible and navigable membership portal that provides the following functionality is a necessity: Modify Plan: Allows members the ability to change coverage tier (e.g., move from a Silver plan to a Gold plan), add or remove dependents or spouses to a plan, and renew or terminate coverage Print: Allows members the ability to request and print ID cards, policy documentation, and plan benefit summaries on demand

5 Claims: Allows members the ability to view and request electronic or paper EOBs on demand, view out-of-pocket expenses, view remaining deductibles, view remaining accumulators (annual maximums, lifetime maximums, orthodontia, etc.), view claim summary history, and view claim detail history Payment/Billing: Allows members the ability to view account balance, payment history, and previous bills; schedule automatic payments; change payment methods; modify the billing mechanism and notifications (timing of bills, renewal process, upcoming bills, etc.); and view financial transaction history User Profile: Allows members the ability to create and modify account information (designate subscribers, password, address, contact information, etc.) for both themselves and dependents; modify home page newsfeeds and layout; modify primary language; and modify notification settings (both frequency and media type) DEDICATED AND TRAINED INDIVIDUAL PRODUCT SUPPORT Health and dental insurers currently treat individual insurance products as an afterthought, dedicating little to no time and resources to developing, marketing, selling, and administering these insurance plans. This must change if an insurer hopes to capture share of the individual market. Payers must establish trained teams to assume various roles supporting individual products: Marketing: adding specialists with a deep understanding of digital marketing and the e-commerce industry to design and manage effective marketing campaigns. Sales/Support: dedicating specially trained staff (to accommodate the specific needs of individuals) to new sales/retention/customer support. This team should have deep knowledge of the individual product offerings in addition to website and claim platform functionality. Responsibilities may include tracking leads, guiding product purchases, answering support calls, servicing accounts, etc. The transformation from a B2B to B2C business model represents a major challenge for healthcare insurers. Payers can successfully navigate this transformation through careful consideration of HIX integration, e- commerce platforms, integrated marketing strategies, self-service channels, and dedicated/trained individual product support teams. Properly executing the five elements above can help payers reduce administrative burdens, increase brand awareness, and improve penetration in the individual health and dental insurance marketplaces.

6 For more information on how to enable individual insurance products that work, please contact Kristin Irving, West Monroe Partners Dental and Vision Payer Strategy and Solution Lead, at 1 Traditional marketing typically includes, but is not limited to, television, radio, and print advertisements, brochures, trade shows, telemarketing, etc. 2 Digital marketing typically includes, but is not limited to, a company s website, blogs, search engine optimization, social media (YouTube, Twitter, Facebook, and Pinterest), etc.