The Payer's Guide to Loyal Members

The 2016 health insurance open enrollment period is right around the corner. Here's a checklist to help you retain members.
Customer Experience

Health insurance companies are gearing up for the next open enrollment season which begins November 1 and will run through January 31, 2016. The open enrollment period is a critical time for health plans to engage their members and attract new customers as consumers assess their health coverage options.

In June, about9.9 million peoplein the U.S. were paying for coverage they purchased through federal and state-based health insurance marketplaces, according to a report released last month by the Centers for Medicare and Medicaid Services. The penalty for not having some form of health coverage will increase in 2016 from the higher of 2 percent of adjustable gross household income or $325 per adult, to the higher of 2.5 percent of household income or $695 per adult.

Even though the penalty for not having health insurance is rising, experts predict that getting more people to sign up for health plans on the government-run marketplaces will be challenging moving forward. Many people who wanted to get coverage have already signed up, while others may receive coverage from an employer group.

Given that attracting new customers is generally more expensive than retaining current customers, health plans are incentivized to give members a reason to remain loyal. There are several steps insurers can take to successfully engage members before, during, and after the open enrollment period, say industry experts and analysts.

Consumer options for individual health insurance under the Affordable Care Act are undergoing numerous changes as health plans assess their positions on the new exchanges and ability to retain members. Health insurancecompanies around the country are seeking rate increases of 20 percent to 40 percent or higher, based on the argument that the health needs of many of their new membersare greater than they had anticipated.BlueCross BlueShield of Tennessee, for example,is asking state regulators for a 36 percent rate increase, citinghigher utilization than it had forecasted. Members of Alliant Health Plans in Georgia could see their premiums rise 38 percent.

Other organizations, like Aetna Life Insurance, are pulling out of some state exchanges. Aetna isdropping its individual insurance plansfrom D.C. Health Link and sent a letter to customers informing them that "we can no longer meet the needs of our customers while remaining competitive in the market," reports The Washington Post.

New Mexico's Office of the Superintendent of Insurance deniedBlue Cross Blue Shield's proposal for a 51.6 percent premium rate increase, so BCBS is dropping the individual plans that were previously offered through the state's exchange.

We can expect to see "a lot of switching" among consumers shopping for health insurance especially if the rate increases are particularly high, says Ashraf Shehata, a Global Healthcare Center of Excellence partner at KPMG US.

"A lot of health plans entered the market with an aggressive pricing model but this is the beginning of the settling phase as they get a better understanding of who their members are and what their needs are," he notes. "That's why this is an important time for health plans to demonstrate the value that their customers are getting."

Educate Members on the Value of Your Plan
As we approach the open enrollment period, health plans have an opportunity to remind members of the benefits they provide and influence those decisions so that they do not leave the plan. Humana, for instance, received approval from the Kentucky Department of Insurance for a 5.2 percent increase on its 2016 exchange plans in Kentucky. As the company updates members on their premiums, the company is making sure that it's also educating members on the full value and range of benefits that they receive, Humana spokesperson Kate Marx says.

The health plan runs a "Humana Helps" campaign in which it hosts educational events and provides online tools to help consumers find out if they are eligible for tax credits as members, understand their plan options, and make it easy for them to enroll. "The more knowledgeable people are about health coverage, the more empowered they are to make smart choices about their unique health needs," Marx maintains.

Make it Easy to Compare Plans
Information transparency and convenience are important for maintaining customer loyalty, agrees Shehata. Many organizations learned a lot from the glitches of last year's open enrollment period, but there are still plenty of opportunities to make it easier for people to select a plan.

"Make the benefits of your plans clear and easy to understand," he says. "We're seeing a lot of companies adopt tools like cost calculators and filters that make it easier for members to compare benefits and find the most effective care for them."

Especially if your rates are increasing, "people tend to focus on the cost of the premium and the deductible but they may not have a full understanding of what you're providing," notes Michael Thrasher, research analyst at research firm ValuePenguin. "It's up to the companies to remind members why they signed up and to better educate them on the value of those benefits."

For instance, in addition to the rising penalty fee, remind members of how much it would cost to have an emergency operation, see a specialist, or get prescription medication without any insurance.

Contact Members on their Terms
With only a few weeks left before the open enrollment period begins, members are being inundated with messages about their coverage. If you haven't done so already, make sure that you're taking the member's communication preferences into consideration, advises Ann Klein, VP and GM of healthcare at Vlocity, a cloud-based CRM applications provider.

"Each person has a preferred way that they want to be contacted," Klein notes. "Few health plans have invested in this level of customization since they're used to dealing with employer groups so you can stand out by making the effort to find out if members prefer to communicate with you through email, over the phone, chat, etc." Surveying your most valuable customers on their communication preferences will help your organization stay ahead of the competition and be more effective in influencing member behavior.

Stay Engaged
Many consumers may wait until the deadline to select or renew a plan so it's important to stay engaged. Remind members when the deadline is approaching, but don't bombard them with messages. After sending the first email, for example, allow members to tell you how often they want to be contacted.

Also, remember that plans need to have a year-round engagement strategy for identifying, communicating, and engaging with members on an on-going basis. Insurers, for instance, tend to overlook engagement in the "pre-care" and "point of care" stages, points out Nathan Ray, a senior manager in West Monroe Partners' healthcare practice. This frequently forces members to scramble to find coverage information for themselves or in reaction to "post care" communications (claims, EOBs, bills). Making it easy for members to understand how much a procedure will cost up front and what they need to know before and after receiving care is important. "Being present at the right point to aid the consumer is a huge opportunity to provide value," Ray notes.

Looking Ahead
Many people will be watching the 2016 open enrollment period as it unfolds. KPMG's Shehata outlined the key patterns and trends that he'll be looking for: Number one is the use of data analytics. "There's a massive uplift in data analytics across industries," he says, "but we're watching to see whether health plans are doing a better job in applying those analytics, like behavioral analytics, to their offerings."

Second, which types of plans are experiencing the most changes? "Are people downshifting to plans with fewer benefits to save money or are they also looking at the value-added components of a plan? Are they evaluating a plan's pharmacy networks, for instance?" And finally, what are people saying about the user experience? Website response times and other technical issues made it difficult for consumers to sign up for plans, but many of those problems should be resolved, Shehata notes.

"There's still a large gap between what's possible with technology and the customer experience in healthcare," he adds. "But each year we should expect to see improvements."