With the group-based market continuing its decline, payers are turning their attention to the growing individual plan market.
In order to capture that business and engage consumers, payers need to build a direct-to-consumer online capability, which is cost-efficient and can be implemented fairly quickly, said Nancy Sansom, spokeswoman for Benefitfocus.
The healthcare benefits software provider released its eDirect Shop & Apply for payers, which enables them to reach out to consumers seeking an individual policy. Payers can brand the software-as-a-service tool to provide education on their individual products and allow comparison shopping.
Payers are thinking differently with the individual market versus the group model, said John West, principal with Deloitte's Healthcare Practice. They need to have an architectural IT competency to be able to focus on customer insights, segmentation and profiling, as well as product evolution and customization and optimization of the Web for customer self-service, he said.
While the national and larger regional plans have that competency, other smaller plans will either need to beef up their infrastructure or form partnerships or regional hubs with other plans to build a services platform, West said.
Web-based, SaaS models will help lower the cost of entry and enable speed to market, said Janice Young, program director for Health Industry Insights. If real-time, interactive tools have analytics and reporting capabilities, payers can tailor their products rapidly in response to consumer feedback, she said.
The individual market has "shown continual growth for several years," said Carl Doty, vice president and research director for Forrester Research. In 2007, he sized the market at $115 billion and growing, thanks to the availability of affordable plans such as consumer-directed health plans and small employers dropping coverage.
Online sites and payers' online quoting tools have grown "tremendously," he said. "Since 2006, the number of individually insured consumers who purchased their policies online has doubled from 14 percent to 28 percent," he said. Some payers, including Aetna, Blue Cross Blue Shield of Florida and Humana, have put up brick-and-mortar stores.
While Doty doesn't think this will become a trend, he said, "I do think it makes sense in markets with a high density of uninsured consumers – like the border states."