CHICAGO – Consumers and insurance brokers are finding that the Internet is the medium of choice for gathering information on the complex individual health plan market.
This is an important trend for payers and employers to keep in mind, experts say, as forces push more and more Americans into individual plans.
Here’s why: With the individual plan market heating up, local brokers are turning to Web-based sales and marketing tools and services to automate the paper- and labor-intensive purchasing process and to compete with national and regional carriers and online marketplaces.
One example: By putting information online in one central place for faster self-service, software company Norvax enables brokers to run quotes, create personalized plans and, most importantly, connect them to consumers, said Brandon Cruz, co-founder, president and CTO.
Cruz pointed out that, according to a Celent July 2007 study, approximately 10 percent of health insurance purchases were 100 percent online purchases, from quote to bind to policy issuance. Celent reported that in 2007 52 percent of health insurance purchases were initiated, influenced or completed online, and it predicts that these purchases will exceed 90 percent by 2011.
Richard Cantu, owner of Texas Health & Life in Round Rock, said the automation advantage allows him to compete with established companies.
“The quoting feature is huge,” he said, enabling him to compare similar plans in real time and saving time and resources.
Bob Brow, owner of Healthquotes USA in Indianapolis, has seen his ability to service the growing individual plan market with Norvax’s automation tools.
About seven years ago the main purchasers of individual plans were the self-employed and students, he said. Today, the healthier employees of small-size companies are opting out of the small group pool and employers are increasingly only covering their employees.
A jointly conducted yearly employer survey by Forrester Research and Employee Benefits News supports the latter scenario.
This year’s survey, which involves more than 900 U.S. employers across industries and of all sizes, revealed that 12 percent of all employers currently require spouses to be on their own health plan if available, said Carl Doty, senior analyst at Forrester Research. Another 12 percent indicated that they plan to implement this requirement within the next two years, meaning that nearly 1 out of 4 U.S. employers will be deploying this tactic by 2010, he said.
Doty believes employer-sponsored health benefits will transition to what he calls a “true-defined contribution model,” in which employers pay into a healthcare “allowance” account – health reimbursement arrangement or health savings account – and employees purchase plans on the open market that are aligned with family budgets and healthcare needs.
“In order for this to really take off, the industry needs some deregulation – much of which has already been proposed,” Doty said, referring to the Wyden-Bennett “Healthy Americans Act” and the Shadegg “Health Care Choice Act.” “This type of scenario is possible today, and a handful of employers are already piloting this approach.”
Will automation in the individual health plan market end up discriminating against the poor or those without Internet access or skills? Tell us what you think -- email your views to editor@healthcarefinancenews.com.