Knowing-the-Uninsured

With the Supreme Court largely upholding President Obama’s Affordable Care Act, the spotlight has once again fallen on the payers and their proposed measures to improve the affordability of health plans and quality of administered care. For a successful implementation of the entire healthcare model, it is imperative that payers possess an in-depth understanding of the health needs and preferences of the beneficiaries, prior to introducing new measures or re-aligning their health plans for consumers.

Despite the mounting uninsured populace being the linchpin of the entire healthcare reforms, little information is available on their health plan preferences and market expectations. In 2007, Harvard Business Review team had conducted a consumer survey in which they analyzed consumers’ medical & financial requirements & their general disposition towards maintaining a healthy lifestyle. Based on the survey results, HBR recommended segmenting consumers based on their health & wealth profiles, considering the diversity of the existing insurance markets. For instance, individuals categorized as healthy worriers, are receptive to new health products but are sensitive to rising healthcare costs and therefore are likely to be best candidates for employer-sponsored insurance. They are receptive to quality service & self-directed analysis tools. On the other hand, unfit and happy segment is mistrustful of doctors and is least responsive to new products. Self-help incentives are likely to work best with such individuals.

PricewaterhouseCoopers (PwC), in another insightful survey identified that consumers are willing to be more actively involved in assessing their health coverage options. There has been a marked interest in value-based insurance plans and a rise in preferences for an integrated healthcare model between insurers & physicians.

Last year, Oliver Wyman in an extensive survey of nearly 1,000 under-65 Americans recognized that the presently uninsured Americans are most likely to purchase insurance through the proposed health insurance exchanges. The survey helped gain valuable insights on the ‘uninsured’, their health profiles, income status & outlooks towards the health system.

The Oliver Wyman team gathered that given an option between purchasing health insurance and paying a penalty, 76% of the surveyed individuals – i.e. 39 million of the 51 million uninsured – would chose the former. As this section represents 12% of the entire U.S. population, these individuals are projected to contribute over $150 billion of the purchasing power in the exchanges.

Health insurance cost or the net premiums applicable after subsidies continues to remain a major determining factor for these individuals. As the applicable federal subsidies would be lesser for higher income individuals’ vis-à-vis the lower FPL income bands, the higher & middle income groups are relatively less likely to purchase health coverage.

Many of these surveyed individuals were willing to pay some extra amount for customized upgrades such as 24/7 access to doctors etc. Most of them were also agreeable towards a $50/month rebate model in exchange for adoption of healthier lifestyles or changes in healthcare access.

For the long term sustainability of the retail healthcare market, healthcare policy administrators, healthcare companies & end-consumers would need to assess and redefine the current healthcare setups. Policy administrators will have to devise strategies that help protect the interests of both healthcare companies & consumers. End consumers will have to become more responsible towards their health and more involved in their health plan purchasing. Insurers too would need to realign their plans & services in accordance with changing consumer health needs and expectations.

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