Open enrollment is right around the corner, but where are the shoppers?
In a recent survey, we asked 1,000 adults aged 18 or older whether they planned to switch their coverage, save on costs, or do nothing at all. What we found is that the majority (over 80 percent of respondents) are not planning to switch their insurance this year, even though one in five of them are dissatisfied with their plan.
What's making folks unhappy? Nearly one-third feel the value for cost of their plan is out of sync. Customer support services (27 percent) and the lack of quality network doctors and hospitals (9 percent) were other reasons for discontent among the insured.
The results shouldn't be surprising. Historically, health plans haven't been thought of as consumer friendly brands. But in an era where every American is buying health insurance – and the cost of their care is going up - health plans need to think about the consumer experience. That means offering transparency tools that make shopping for care and evaluating choices easy. It means understanding cost and value in both care and benefits. And it means providing services that impact a person's everyday health in a way that's relevant and meaningful.
Instead, the Vitals survey found that many people feel disenfranchised. They're either over-insured or under-insured, and they don't have a clear way to measure value. Who are they? Our research revealed three types of health plan shoppers approaching the market this season: the Reluctant, the Premium, and the Defaulter.
The Reluctant doesn't want to buy insurance and isn't satisfied with their plan – if they even have one. They're more likely to have an HMO to keep costs down, but still say they're not getting a good value for cost. Over 1 in 4 will switch their health plan during open enrollment this year. Their main gripe: Cost. They index higher for cost increases over the past year and report being surprised more by health care costs this year, compared to last year.
Yet, young and free from the responsibility of dependents, healthy Reluctants can opt for a high-deductible health plan or a plan that only covers catastrophic care. Under the ACA, preventative services are covered in full, so there's no worry about having to pay for routine exams. A health savings account or flexible spending account can help with reoccurring health costs, paid with pre-tax dollars.
The Premium is most likely to have Cadillac-like coverage for their health care. They index higher for employer-provided health care and PPO-type plans, which offer the most flexibility. Premium shoppers are most likely to say they're happy with their health insurance – only 5 percent will switch during open enrollment! And they uniformly agree they have adequate access to medical care.
However, Premiums are likely to be overspending for their care. It's nice not having to worry about anything but a small co-pay, but they may be blowing money on premiums, rather than using their hard-earned cash in more productive ways.
The Defaulter is on cruise control and typically doesn't review or change their plan from year to year. But Defaulters could be in store for a rude awakening. Since the ACA, it's dangerous to assume your plan will stay the same. Premiums, deductibles and coverage could change this year – even if you stick with what you have.
As open enrollment day approaches, health plans need to understand the needs of these shoppers. For one, they can do better with their customer service and websites. Full transparency suites – cost calculators, doctor and facility directories, and quality indicators like doctor reviews, can help members gain more control over their plan choices and costs.
In addition, insurers can do a better job of informing people about changes to their current plan or help them into new plans that have benefits better suited to their needs. More emphasis needs to be placed on convenience, as well. Telemedicine is emerging as a viable care option employers are offering to their workers. As is online scheduling, with a preference given to after-hour and weekend appointments. Engagement programs, like email reminders for prevention screenings or refilling prescriptions, can provide value and build brand equity.
Health insurance helps consumers manage one of their most personal needs – their health. It's time plans embrace the fact that they need to think different about their brands – and their customers.
Mitch Rothschild is the CEO of Vitals.