The number of Americans who buy ObamaCare health insurance in the next Open Enrollment period will far surpass the eight million who enrolled in plans earlier this year. It is not unreasonable, in fact it is probably conservative, to expect that 12-16 million people will sign up for plans between November 15, 2014 and February 15, 2015. This surge in activity will demand that both private companies and federal and state marketplaces become more efficient in serving new buyers of ObamaCare.
This is despite the fact that some of those who enrolled earlier this year have already discontinued their plans, a typical occurrence in the individual health market. About 20% of individuals do not pay their initial premium and historically between 3-4 percent of those with plans drop coverage each month as they migrate to new jobs, have a change in their income or family status, or determine they no longer need it, etc. Despite reforms to the individual market, this normal churn is continuing.
The lapses in current enrollment will, however, be easily offset by a surge of individuals who did not buy plans last year. First, there is an enormous pool of individuals who currently remain uninsured, estimated to be as big as 40 million. The penalties for not being insured for the 2014 tax year were relatively small. In 2015 they climb to $325 per adult and $162.50 per child or 2% of adjusted household income, whichever is higher. Once the full force of the tax penalties is felt, choosing to remain uninsured will not be an attractive option.
The second driver of growth is the likelihood that many small businesses will stop providing coverage for their employees which may cause as many as 20 million people to migrate to individual plans.
Finally, between 8 and 10 million individuals are currently covered by pre-ObamaCare plans that have been ‘grandfathered’, most of which will end by December 31, 2014. The individuals covered by these plans will be forced to shop for new insurance in the next Open Enrollment period.
In the 2014/2015 Open Enrollment period there could be twice as many people shopping for health plans, but with only half the time to enroll. Insurance marketers, brokers, lead generators and every other class of intermediary need to make corresponding changes to the way they approach the market. Some strategies worth considering are:
- For marketers — consumers now have access to more and better information concerning insurance plans. You need to take targeting and tailoring your message to a higher level of sophistication;
- For brokers – the days of being a spreadsheet resource is over. No one needs you at the kitchen table to compare prices. You will need to develop more qualitative value by becoming a valued counselor. Ask questions that help your customer understand what type of plan is best for them, and show them the options – based on your knowledge and experience – that best fit their needs.
- For lead generators – be prepare for huge spikes in volume. Ramp up your infrastructure to handle peak demand. Matching the right prospect to the right marketer or broker takes on a new urgency. Pick a few good partners and give them extraordinary service.
- For all of us – remember that buying health insurance is not like buying travel. Everyone has bought an airline ticket online, or booked a hotel. But a large portion of the new consumers have never bought health insurance before. They don’t understand ‘insurance-speak’. Many don’t know the difference between co-insurance, deductible, co-pay or in-network vs. out-of-network. Speak to them in their language, not our lingo.