As a market researcher who has studied the health insurance industry for over two decades, this year has shown a dramatic shift in consumer thinking; that is, consumers are being forced to think harder than ever before to determine which health insurance plan is best for their family.
While I have the benefit of working directly with health insurance companies on product development, numerous articles are published each week illustrating some of the challenges consumers are facing with their new plans. These experiences make it clear why conjoint (Discrete Choice) is such a strong tool to understand consumer preferences for different health insurance plan components.
As I digest all of this information, a number of themes continue to surface:
High deductibles – consumers need to know what is subject to the deductible and what isn’t (preventive, Rx etc.). It’s unlikely that insurers want consumers to avoid preventive care as a way to manage their costs, and yet that is exactly what some consumers are doing.
Limited Network – consumers are learning the hard way that you get what you pay for. There are many stories of consumers having to drive ridiculous distances to get treatment from an in-network provider, or those who validated that their physician accepts their carrier to later learn that they don’t accept all plans offered by the carrier. Many are also having difficulty getting an appointment within a reasonable period of time, and some have even visited an in-network hospital and received a bill from an out-of-network physician who treated them there.
When selecting a plan for 2015, those who have been ‘burned’ are likely to start paying more attention to the specific doctors and hospitals in the network. Health insurers need to ensure that in-network includes the right combination of providers for their member base.
In the coming years, I believe hospitals, physicians, insurers and regulators, will be working in tandem to ensure all plans have a comprehensive network and to reduce the burden network places on the consumer.
Premium - of course, premiums will always be important to consumers and must be competitive. However, consumers are more likely than ever to look beyond the premium - to ensure that the plan they select meets their needs while also providing them with the best overall value. They’ve learned that cost goes well beyond premium – and must account for deductible and co-pays.
Brand – of course it matters, but less so now that all plans are required to meet certain minimum standards. In the short term, I believe we’ll continue to find that higher utilizers pay more attention to the brand, while lower utilizers will place more importance on costs. Over time however, I suspect brand will carry less and less value as consumer confidence in the products will build.
In 2015, it is likely we’ll see more consumers paying slightly higher premiums for plans that allow them access to broader networks, and that more attention will be paid to the benefits of lower premiums for high deductible plans.
While the above features lend themselves quite well to conjoint there are issues related to the health insurance market that require a deft touch and experience to execute a successful effort (not the least of which is significant differences in the premiums being paid).
I look forward to seeing some creative features and benefits in health insurer’s 2015 product offerings.