We’re often asked by carriers as to whether they should have a strategy to grow the individual market prior to 2014.
Our response? Absolutely. Here are three reasons why:
First, health plans should learn how to target and market to individuals because it is the right thing for their business. Regardless of reform there is increasing evidence that employers want greater predictability and control in their benefit costs. Consequently they are moving towards the same “defined contribution” approach that has occurred in the retirement space. The net effect is that individuals will be increasingly responsible for selecting their own benefits. Plans will find that their ability to appeal to consumers will be essential to their long term success.
Second, all health plans have a learning curve in retooling their sales, marketing and product efforts to be effective in the individual market. Traditional plans as well as newly emerging accountable care organizations (ACOs) are undertaking various efforts to round out their long term revenue prospects, from the expansion of their ancillary benefits to the acquisition of provider groups. While diverse, these strategies all point to the long term focus of capturing more of a consumer’s dollars allocated towards protecting their health and wealth. If a plan intends to “stay in the game” they need to start yesterday.
Third, one of the biggest challenges many health plans have is in the brand equity they have with consumers. All too often, research suggests that consumers do not hold their health plan in high regard. Brand awareness and brand equity are part of the transition health plans must make in moving from employer focused sales to individual sales. And since it takes time and resources to measure and address brand issues, it is the third reason why plans should move now and not wait for 2014.