Moving beyond the 2014 "land grab," insurers in 2015 relied upon tried and true direct marketing approaches for member acquisition. Like the first open enrollment period, it seems for many, this was effective.
The marketing mantra was simple: offer a product supported by an optimal mix of affordability, network and brand strength, and the consumer will come. And come they did--in the 2015 open enrollment period 11,688,074 individuals selected a marketplace plan. This translates into 42 percent of the estimated potential number of enrollees in the population.
Looking ahead to 2016 and beyond, we must accept this will likely no longer be the case, as the population that now remains in the market are very likely the true uninsured, a difficult segment to target and attract. Supporting this supposition is the fact that individuals receiving subsidies made up 87 percent of the federal marketplace enrollees in the 2015 open enrollment period, and we expect this trend to continue.
While there are still many unknowns about the individual insurance market, insurance marketers can agree on some key realities: there isn't a "normal market" yet and clear consumer trends have not evolved. The good news is two years of experience brings a wealth of data and learning to inform future decisions. At the same time, it brings increased complexity and challenges to understand how best to prioritize the investment of limited marketing dollars.
Establishing the right customer portfolio is determined by many factors. As preparations for 2016 open enrollment unfold, understanding how to align traditional direct marketing principles with advanced personalization through target selection, campaign execution and member engagement is key.
Can you identify the right customer segments necessary to establish a balanced member base? What targeting priorities are in place to cost effectively engage with consumers across a multi-channel strategy? How quickly can you identify, capture and apply consumer and industry insights to ensure messaging relevance and effectiveness throughout your communications?
Acquiring a strong customer base, however, is only the beginning. Retaining and managing a stable member base requires communicating properly with members that want to manage their health, either independently or through programs designed for them. It also requires balancing lessons learned among emerging trends in the near term with continued honing of strategies to add and replace members for maximum lifetime value over the long term.
Health insurers may rely on managed care history to identify leading indicators of possible industry marketing trends. Consider Medicare and the launch of Part D in 2005. Carriers with low priced plans, especially those combined with rich benefits, captured the most share in the new market. But as high utilization drove plan premiums up, many seniors switched to more balanced alternatives. With this and other market dynamics in mind, managing migration as members "buy up" or "buy down" may be just as important to balancing your portfolio as continuous new member acquisition.
The individual health insurance marketplace has a way to go before insurers can easily predict consumer behavior. Data-based personalized acquisition and member engagement and retention strategies will be key to maximum portfolio performance in the short and long run.
Tim Ferguson is associate client partner and Darla Leseck is director at Merkle.