Health Insurers Prepare for the Affordable Care Act
Between politicians at the podium and talking heads on television, most of what the public knows about the Affordable Care Act (ACA) hails from the headlines. But, in less than one year, millions of Americans age 18-64 will be seeking healthcare coverage independently for the first time with little information to guide their decisions. And, as the "2013 Consumer Health Care Market Report" by The Agency Inside Harte-Hanks highlights, many insurers are not yet prepared to handle the projected number of inquiries, either.
In 2014, new mandates will require the uninsured to purchase private healthcare coverage, opening up the opportunity for insurers to target those who make too much money to qualify for Medicaid and those who could not afford or would not buy health insurance on the private market before. These non-elderly uninsureds represent the primary focal point for insurance companies, as they look to market to an audience segment with which they've never interacted on a one-to-one basis.
Scott Overholt, vice president, healthcare markets at The Agency Inside Harte-Hanks, reemphasizes that the things most people know about the law are politically motivated arguments found in the media, most of which have little to do with consumers or health. If insurers don't act now, they risk relinquishing an opportunity to build relationships with desirable uninsureds early and often in this growing environment of fear, doubt, and uncertainty. These health insurance companies know they must identify and engage with healthy targets, thereby bringing predictive analytics into play.
"Analytics will become even more important to understand the new customer base, map its health risk profile, and adjust strategies for the next round of product pricing and marketing," says Overholt. The second piece of the puzzle is understanding consumer motivations around the ACA and the channels in which they want to communicate about open enrollment."
The Agency's research, which polled more than 600 presently uninsured Americans age 18-64, explores how those with and without children are responding to the impending mandate, including motivations, channel preference, and likelihood to purchase. By shedding light on this untapped marketplace, this study offers insurers insight that can help them begin to focus their efforts more appropriately and deploy their budget accordingly. Key findings are as follows:
For uninsured adults who rate their health at that of their family members as good--
- • Most have carried health insurance coverage in the past, yet more than two-thirds currently don't have coverage for their children.
- • People and families in this group have 25 percent fewer prescription medicines than average.
- • These uninsureds are more likely to say that the ACA is bad and think that health insurance will remain unaffordable.
For young adults age 18-39 in good health--
- • One in six has never had health insurance. For those with children, nearly two-thirds don't have insurance for them.
- • Most would trust their parents for advice and are generally open to what the ACA has to offer.
- • Two-fifths of those polled are "extremely" or "very likely" to sign up, while an additional two-fifths are "somewhat likely".
- • This younger demographic is more likely to rent than their older counterparts.
By understanding the significant factors driving these uninsureds' decisions, companies can use this opportunity to connect with and educate individuals on the benefits of owning health insurance. "Insurers are [currently] using simple channels that communicate quickly and easily, like video," Overholt adds. "Healthcare marketers are up against an environment of negative healthcare messages. By driving consumers to digital destinations, they are using video to explain the 'what's in it for you, the consumer' to [provide] a better understanding of the individual mandate and the value proposition of the insurer."
Ultimately, by observing and understanding consumer behaviors, insurers will develop methods for attracting the younger, healthier members of this demographic who will keep their risk portfolio in balance, for those uninsureds with the low-quality health will be eager to sign up. Attracting those at peak health will mitigate the risk to the company's bottom line and build the foundation for trustworthy, reliable relationships moving forward.