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The new laws of consumer attraction for health insurers

IN DEMAND, OUT OF THE ORDINARY

Highly desirable consumers (HDCs) are younger than 45 with no severe or pervasive health conditions who never use their health coverage or use it only for routine services. They are the most in demand—and often the hardest to acquire.

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Yet private insurers need to enroll as many HDCs as possible to maintain a healthy risk pool and maximize profitability. Public health insurance exchanges (HIX) are also eager to sign up these consumers so they can keep insurers participating.

A recent Accenture survey shows that HDCs have distinct attitudes and buying behaviors that require new acquisition and retention strategies. The more adept that insurers and public exchanges become at designing products, prices, outreach and customer experiences attractive to this group, the better off they will be.

A DIFFERENT BREED

Young and healthy, HDCs are also more digitally savvy than others. These consumers are also “stickier” than other segments. Our survey results reveal that while HDCs (23 percent) are only slightly less likely to switch plans with their existing insurer than all others (26 percent), they are 35 percent more likely to take no action at all during open enrollment (not even shop for new plans) and let their coverage passively renew.

This consumer stickiness is mostly about inertia, not enthusiasm. In fact, HDCs are 50 percent more likely to indicate that the reason they passively renewed is a perception that switching was a hassle. HDCs are the most likely to drop their coverage now that the individual mandate has been revoked. The threat of a tax penalty for being uninsured is the top factor influencing non-HIX HDCs to shop for coverage. With the federal mandate eliminated, it will be critical to make strategic changes to acquire HDCs and keep them engaged and satisfied.

Factors that influence HDCs to shop



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Health insurance shopping information sources for HDCs


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This group is much easier to influence to shop than other consumers are. HDCs are less likely to reach out directly to insurers on their own. Rather than approaching a carrier, assister or broker for help with shopping, these consumers typically seek out their friends, families or doctors for advice. In fact, survey respondents most often cited friends and family as their source of shopping assistance and information.

PRICE SHOPPERS

When making a decision about health insurance options, HDCs are price shoppers. Our survey shows that price is the number one factor when these consumers choose a new plan, and that they are far less concerned with network coverage, customer experience or other carrier interactions.

Price influences retention of HDCs too. Forty-eight percent of those who switched plans would have stayed if their insurer had offered a better price. The desire to keep a preferred doctor, poor member experiences, and a lack of digital solutions barely rank as reasons to leave. When they do stay, HDCs want to be rewarded. They are more likely than other consumers to stay with an insurer when they are recognized for doing business with them and offered preferential treatment.

In many ways, HDCs are not sophisticated shoppers. They have been lucky enough and healthy enough that they have not had to be. In fact, 28 percent of HDCs in our sample were first-time buyers whose last coverage was their parents’ plan. To them, health insurance is a commodity; the cheaper the better.

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FIRST MOVE WINS

HDCs are price sensitive, do not reach out on their own, and are easily influenced. In both private insurance and HIX markets, HDCs are more likely than other consumers to shop because of direct outreach from an HIX, insurer or community group.

The insurers and health insurance exchanges that win with this critical customer segment will be the ones who engage them first. There are some fundamentals to acquiring these consumers and keeping them satisfied:


BALANCE PRICE AND EXPERIENCE
Price clearly matters to these consumers, and insurers ignore this at their own risk. However, insurers cannot discount the importance of customer experience either.

MATCH MESSAGES AND CHANNELS
There is a strong case for insurers and public exchanges to ramp up marketing and outreach efforts, with an emphasis on multichannel advertising and strengthening their social media presence.

MEET PEOPLE WHERE THEY ARE
Considering how effective community groups can be in influencing HDCs, it is in insurers’ best interest to partner with these groups to develop and implement creative, even unconventional, programs for these coveted consumers.

STAND OUT FROM THE PACK
Time is of the essence for insurers and health insurance exchanges to get HDCs to notice them. This rush to the finish line dynamic is real, and insurers must move first and fast.


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AUTHORS

Philip Poley

Managing Director, Health Insurance
Exchange and Medicaid Managed Care

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Loren McCaghy

Director of Consumer
Engagement and Product Insight

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Scott Smith

Consultant

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