May 2, 2017
Healthcare Buyers Need Clearer Choices
Over the past decade, many industries have made tremendous progress when it comes to offering consumer choice. Healthcare has not.
Over the past decade, many industries have made tremendous progress when it comes to offering consumer choice. Just look at the travel industry. Twenty years ago, it wasn’t possible to search for a flight, compare dozens of different options side-by-side and tailor your selection to match your specific needs. Shopping experiences across many categories are now offering choices — and making those choices clear. The healthcare industry, however, is lagging behind. And when it comes to something as critical as healthcare, clear choices are imperative. Consumers who make a less-than-optimum insurance choice face higher costs, less satisfaction and poorer health when an issue that should be looked after gets ignored because it’s not covered.
These Six Factors Make Clear Choices Imperative for Health Insurance Shoppers
When most individuals shop for a new plan, it’s not just a matter of going with the option that comes with the lowest monthly premium. There’s always a juggling act between the monthly premium and out-of-pocket costs. If the co-pays and deductibles are too high, if there are services that individuals use that aren’t covered, the lowest-cost plan may well end up costing the consumer more. Consumers need to understand their total cost of healthcare with any given plan.
See also: Key Misconceptions on Health Insurance
2. What’s Covered
After the basics, individuals may have a wide range of services for which they seek coverage, and every healthcare consumer will have different needs. One individual may require mental health services, another physical therapy. For yet another, it’s audiology services. Even if a certain service is covered at some level, there will likely be different limits (e.g., the number of physical therapy sessions allowed) from one plan to the next. While it’s not possible for individuals to anticipate everything that they might need in a year, consumers should be experts in their current requirements.
3. Prescription Drug Coverage
Formularies listing the prescription drugs covered under each insurance plan can be extensive. And when they’re on paper, they can be very difficult to navigate. However, consumers are quickly learning the importance of determining whether the drugs they take are covered by their health insurance plans. Given last year’s unexpected cost increases for the EpiPen, consumers are wising up. Looking through the formulary and not finding an expensive drug they need to take regularly may knock a plan out of consideration.
4. Provider Network
Whether a healthcare provider is in-network is a big deal to consumers. In fact, when it comes to choosing a physician, it may be the biggest deal. A 2015 survey of more than a thousand patients showed that 90% of consumers reported that the most important attribute of a physician is whether they accept the individual’s health insurance – more important even than the physician’s clinical experience. Consumers need to know what happens when they see a physician or other provider, or use a hospital, that’s outside of their network: The costs may be untenable. Consumers might be okay with switching from a primary care physician to someone new if they only see them once a year for a regular physical. But if they’ve developed a close relationship with their pediatrician – someone they like and trust – they’ll want to make sure that their provider is in-network.
5. Unique Elements
Consumers are taking more ownership of their own healthcare. These days, when shopping for health insurance, they are now factoring in all of the details that make them unique. For example, if their kids play sports, they’re thinking about ER visits. When they’re planning an addition to the family, they’re doing research to see if the facility where they want to have their baby is covered by their health plan. There are many unique elements that require choice. Health insurance is not a one-size fits all solution.
6. Overall Risk Aversion
When it comes to choosing a health insurance plan, risk aversion is really about what level of financial risk an individual is able to accept. And, in this regard, every individual is different. The lower-cost premium plan might be fine if there’s a low probability of something occurring that is not covered. But if you’re likely to be making frequent ER trips with your kids, that low-premium plan may not be so attractive. It’s up to the individual to determine how risk-averse they are.
Insurance customers are desperate for clear choices that are easy to understand. They need them because everyone is unique and living a different situation. And, given the wide range of choices that are available to consumers in so many other aspects of their lives, they expect options. Choices provide an opportunity for your customers to find the best-fitting health insurance plan. Are you offering enough choices?
See also: The Basic Problem for Health Insurance
Clearly presenting the information that today’s healthcare consumers require can be overwhelming. After all, carriers are experts in insurance, not in software application development and data presentation. Fortunately, in the 21st century, data is highly digestible, usable and transparent. Health insurtech companies across the nation are making sure of that. As insurance carriers and health insurtech companies work together, slowly but surely, the industry will progress, offering more clearly defined choices for today’s consumers.