How Insurers Can Win on the Healthcare Exchange

Five ideas health insurers can implement now to woo Hispanics and Millennials

Despite a rocky and controversial kick-off, America’s health insurance marketplaces have reduced the number of uninsured consumers to the lowest level in 50 years. For insurers though, the results are inconclusive. The Commonwealth Fund reported a 25 percent incline in participation among insurers while high-profile groups, like UnitedHealth, are backing out.

With so many providers active on the exchange, we’re seeing an equilibrium shift where we have ample supply and lesser demand. This means the time is now for insurance providers to get competitive by creating better healthcare experiences and fighting for relevance among consumers.

Prophet conducted research on the exchange aimed at understanding what happened in year one (2014) and what can be learned in anticipation for year two. That research identified major opportunities for insurance providers to gain market share.

Our research found that 43 percent of uninsured Hispanics say they will or probably will buy coverage soon, while 30 percent of Millennials say the same. These two groups are eager to hear from companies that will take their unique needs into account.

The Five Barriers Insurers Face When Targeting Hispanic and Millennial Consumers

Following are five barriers insurance companies must break through in order to succeed with Hispanic and Millennial consumers, and examples of how companies in other industries are succeeding at doing so:

Barrier No. 1: They don’t understand your product. At all.

Many consumers say they’d rather scrub toilets or do their taxes than shop for health insurance, according Aflac. Words like deductible, catastrophic cap and copay alienate and confuse them. About 19 percent of Millennials and 40 percent of Hispanics say they still don’t understand how the exchanges work, compared with 17 percent and 24 percent in 2014.

How Verizon breaks through: Speak Millennial

In the world internet services, speed is currency, but Verizon recognized that “mbps” is meaningless to consumers. So they now use simpler language. The lowest speed is called “Everyday browser,” higher speeds are “Powered-up Play,” and the highest level is “Unmatched Streaming.” Customers identify their online behaviors to pick the product that makes sense for them.

Make it your own: Translate relevant ideas into digestible bits

Breaking messages down into basic and appealing terms isn’t easy, but it has to be done. Insurers can inject expertise into the channels that Millennials already use, like YouTube and messaging apps.

Barrier No. 2: They want to know what’s in it for them

Both Gen Y and Hispanic shoppers are increasingly seeking value, beyond price, from the brands they interact with. They’ll go for a more expensive plan if it makes sense, and if they can see that the extra benefits are relevant to them.

How State Farm breaks through: Invite them for coffee

Because buying different levels of auto insurance also requires plenty of financial coaching, State Farm developed the Next Door Café in Chicago. The Café is a venue for no-pressure information exchange, community education and meeting spaces for prospective and existing customers. The Café cultivates an environment where people learn, relax and interact with representatives.

Make it your own: Look for areas where insurance company expertise intersects with Millennial behaviors

If an insurance company provides allowances for holistic treatments (like spa treatments) or subsidies for exercise (such as gym memberships), find ways to woo consumers in spas and health clubs. Look for opportunities where reps can engage in low-pressure settings.

Barrier No. 3: They don’t trust you

While Hispanics represent an important and lucrative opportunity—because they are more likely to buy expensive plans—many also have a fundamental mistrust of government-offered options. About 38 percent in our survey say they would never purchase a government health plan, compared to just 28 percent of non-Hispanics.

How CVS breaks through: Become a genuine cultural partner

When CVS vowed to make Hispanics a key priority, it didn’t just translate some ads and run them in Spanish media. Earlier this year, it launched CVS Pharmacy y más, a shopping experience in the Los Angeles market that offers enhanced, personalized service, including bilingual signage and staff, more than 1,500 trusted Hispanic products, and better prices.

Make it your own: Create products and programs that speak to subtle differences in preferences, showing you understand their unique needs and concerns. Consider including more extensively tailored options for children, for example, since Hispanic families are typically larger and pediatric health is one of their biggest concerns. And offer it all in an experience that is genuine and authentic.

Barrier No. 4: They’d rather be mobile

Both Hispanics and Millennials are more likely to connect with brands that provide omnichannel experiences, especially mobile. Yet branded apps are typically ineffective.

How Coca-Cola breaks through: Focus on community, not apps

One reason people love their phones is because they increase connections to other people. So Coca-Cola created “Haz Alguien Feliz,” a mobile-first initiative that encourages participants to do random acts of kindness, take a picture and upload it. Combined with on-the-ground influencers, it generated awareness, engagement and conversation.

Make it your own: Insurance companies can increase awareness through mobile efforts that aren’t just transactional but engaging. They can provide education, guidance and support for enrolling.

Barrier No. 5:  You’re using the wrong touchpoints

While many companies court Hispanics, it’s often an afterthought. And it shows.

How McDonald’s breaks through: Using a segmentation model that recognizes nuances in lifestyle, engagement preferences and cultural differences based on country of origin, it identifies how and when to engage consumers with content. To serve its Latino customers better, McDonald’s has a marketing director solely responsible for focusing on the Hispanic segment, who works with multi-cultural directors and employees to develop specific strategies and content.

Make it your own: Invest in the Hispanic population with a dedicated team of resources to understand how best to connect with them. Start by identifying ways to uncover cultural differences, and create experiences that will have a solid impact on purchase and enrollment.



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