Secure membership in changing times

September 1, 2009

Emerging markets provide some potential for new members while retaining current members requires improved service offerings

"Service is an important competitive battlefield in the health-service business," says Joseph Mondy, CIGNA company spokesperson.

CIGNA recently extended the hours of its service call center to 24 hours, seven days a week, to answer questions about claims, benefits and eligibility and to assist in locating network providers. Mondy says CIGNA is the first health plan to offer this service 24/7 to members and providers.

By rebalancing the workloads of the call center staff, CIGNA was able to extend the hours without incurring additional administrative costs, Mondy says. Select representatives are also proactively reading Twitter tweets to reach out to members who might benefit from their assistance through social media contact.

Job losses caused by the recession and the cost of insurance coverage are the two main factors causing health plans to lose enrollees. Large national insurers are reporting overall membership losses of 5% or more. Humana, for example, saw its fully funded group lives fall nearly 8% in the second quarter of 2009.

TAPPING INDIVIDUAL POTENTIAL

However, many speculate that the individual market has potential now, particularly with Congress still in the process of hashing out legislation to increase coverage in the near future and employer-sponsored coverage on a downward trend.

"We built the business unit from scratch in a three- to four-year period," says Doug Bennett, Humana director of corporate communications.

Bennett recommends that plans maximize their Internet presence to connect with individuals seeking coverage. For example, he says, writing online content in plain language can make a site more search-engine-friendly.

Tami Quiram, HumanaOne director, says the individual market has been somewhat untapped because employees losing their group coverage tend to consider COBRA as their only alternative. Direct marketing and live call center assistance is the best way to reach that segment, she says.

"It's really a retail business with people making independent decisions," she says. "There's nothing more consumer-centric than an individual making decisions about the tradeoff between premium and benefit."

According to David G. Knott, senior vice president and global practice leader, Booz & Company, insurance exchanges-heavily advocated by health reform thought leaders-will offer plans opportunity in the individual and small-group market.

"That's going to be an important change because it forms exchanges around purchasers who did not have much negotiating clout when they were buying benefits in the past," he says.

Plans will need to improve their marketing, segmenting and selling in the individual market, even though most plans have largely focused on business-to-business relationships in the past. Building a brand with marketable products and offering post-enrollment service to individual buyers who don't have a human-resources advocate will help differentiate plans in an exchange. Competitive exchanges could also drive prices down, however.

"For plans already serving those markets and relying on those segments for some of their profit margin, they also need to think through how they keep their profit picture in tact," Knott says.