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70 percent of health plans are not ready for open enrollment

70 percent of health plans are not ready for open enrollment

As  health plans take the field to compete for 10 million online shoppers, 70 percent of them are not ready.  As ill-prepared as a baseball team without an infield, 70 percent of health plans have holes in the member purchase experience.

Most Health Plans Will Lose Market Share

Most health plans have left an open gap for their competitors to steal their members. The stakes are high. In 2014, 50 percent of consumers who returned to HealthCare.gov changed health insurance providers.  When consumers try to buy a plan, 80 percent abandon their purchase while they shop.  To win new members, health plans must become more member-centric.

Insurance Payment Systems and Consumer Preferences

 
Source: Member preferences from Javelin Strategy & Research. Insurers’ payment choices from ACI Worldwide & Ovum Global Payments Insight survey of insurers with additional review of 10 leading health plans conducted on October 28, 2015

Most Health Plans Not Meeting Member Expectations 

70 percent of health insurance companies will miss out on new sales by not providing members all the options they want to pay for their plan (see the red bar on the graph above). Electronic checks/ACH rank highest in member preference with 37 percent of members, yet 26 percent of insurance companies do not offer this option for members to buy insurance. 

Health plans give their competitors an opportunity to meet member preferences with every payment choice they do not offer. Though smaller than ACH, at 11 percent, mobile payments still represent a significant opportunity for health plans to sign-up new members. Most insurers miss this opportunity.

It happened more than 20 years ago, but I still remember when Pizza Hut missed an opportunity by not accepting credit cards. The smile from the piping hot pizza became a big frown when we learned we had to drive home and back to pay with a check. Most health plans put online shoppers in a similar situation by limiting how shoppers can buy insurance. For example, the 40 percent of insurers not accepting cash limit their ability to win lower-income shoppers.

Security Fears & Complex Ecosystem Stifled Progress

To meet member expectations, 84 percent of insurers prioritized a comprehensive digital strategy, but security and complexity prevented progress.  Fears of exposing customer information prevented investment in insurance payment systems. The complexity of many different ways consumers can purchase also inhibited health plans. Though progress has been slower than desired, health plans look forward with optimism.

Consumers purchase health insurance through different channels

Consumers purchase healthcare through different channels

Source: Forrester Research, Inc. “2014 Website Functionality Benchmark: US Health Insurance Plan Public Sites”, Peter Mueller, March 9, 2015.

Health Plans Increasing Investment to Win & Retain Members

“Leading health plans have been vocal about finally making serious investments in retail-oriented, digital shop-to-enroll experiences,” writes industry expert Peter Mueller.  They recognize the moment of truth is when shoppers become members by making a payment. To win and retain members, health insurers plan significant changes:

• 50% of insurers are evaluating 8 new payment options
• 49% of insurers are increasing investment in insurance payment systems
• 41% are holding investment constant

New investments in tokenization, interactive eBilling and recurring card payments will spark market share growth for health plans.

53% of Insurers Want to Mimic Apple Pay

To address security fears, most insurers plan to use tokenization technology like that in Apple Pay. Apple Pay created excitement across the country by offering a simpler and more secure shopping experience; and the key to Apple Pay’s enhanced security lies in that it does not transmit payment card numbers to the merchant—it uses a token instead.

Health Plan Boosts Member Engagement with Interactive Documents
 

eBilling for healthcare insurance

A large health plan in the Midwest turned its most frequent member touchpoint into an opportunity to deepen relationships. This insurer saw the tremendous untapped opportunity in the eBills and explanation of benefits they send members. Today, 16 percent of insurers report that eBilling has boosted member engagement. This will improve. And soon, the industry norm will be to incorporate the most promising member engagement technologies listed below into the most frequent member touch points – eBills and explanations of benefits.
 

Insurance Payment Systems to Engage Members

Source: ACI and GatePoint Research survey of insurance companies

One Health Plan Seized the Opportunity to Retain Members

Health plans across the country are enhancing their member experience. To bolster retention, a large health plan in the northeast recognized members wanted to not only start their membership by paying with a credit or debit card, but also renew their health plan with automatic card payments. With market share ramifications, more health plans will focus on retaining members with initiatives like this.

Just as major league teams add talent during the season, it’s not too late for health plans to fill their gaps and finish this year’s open enrollment season by winning and retaining more members.

[ 1 ] U.S. Department of Health and Human Services.
[ 2 ] Armour, Stephanie. “Premiums for Health Insurance Bought on Exchanges to Climb in 2016.” Wall Street Journal October 26, 2015.
[ 3 ] Insurance Business America
[ 4 ] Forrester Research, Inc., “Trends 2015: North American Digital Insurance,” March 23, 2015.