EDEN PRAIRIE, MN – Three health plans have completed beta testing of Ingenix’s real-time medical underwriting solution.
The application, now generally available, is designed for small businesses, which Ingenix says is a critical part of the health plan market and one that is experiencing high turnover.
Phil Harker, vice president of risk management for Ingenix, said individual and small group businesses represent, conservatively, 40 percent to 50 percent of most large health plans’ business, and that percentage is even larger for regional and one-state plans.
“We know that because of current processes, underwriting individual and small groups takes up the majority of an underwriting department’s time,” he said.
The Ingenix tool lets health plans automatically access pharmacy claims data for new
business and access existing claims data for renewing businesses. “The system can access data from whatever claims system the payer already has,” he said.
For small businesses that don’t offer health insurance, thus forcing employees to find their own individual insurance, Harter said, “The system is equally valuable in the individual lines market as the small group.”
There are two pieces of automation in the underwriting business, said Cynthia Burghard, research director at Gartner. While Ingenix’s product collects data from various external sources to help the underwriters make a decision, she said, it’s more typical to automate the process from when someone submits an application on the payer’s Web site to when they get a rate quote.
“Without automation, it can take several weeks to get a quote from a payer, whereas with automation it is down to days,” Burghard said.
Automation lets underwriters focus on evaluating medical information bureau data to set premium rates rather than wasting time on routine tasks.
“The trend in healthcare is moving towards consumer interaction and accountability,” Harker said. As a result, he predicted, health plans will find individual and small group insurance to be the growth areas of the future.
Harker believes the plans that succeed will be those that make the sales experience the best and the most convenient for broker and consumer. “This service will be commonplace, and plans will need to adopt to compete,” he said.
“Payers that have automated this (routine task) process see it as a way of being more customer-friendly and easier to do business with, and are tying it with their consumer-directed healthcare products,” Burghard observed.