Now that the near-deafening noise surrounding the Affordable Care Act’s Healthcare Exchanges has subsided, many Americans are eager to find out what comes next. So far, 8 million people—more than expected—have signed up through the Healthcare Exchanges, the online marketplaces created as part of 2010’s ACA. What were their experiences like?
In addition the lessons we can learn from Year One, what are the opportunities for Year Two and beyond? What are the best ways to connect with the estimated 40 million Americans who are still without health insurance? As these exchanges move past their infancy, what will it take to win new customers?
To gain better insight into this important new market, we conducted a study gathering the thoughts and biases of 1,000 people 18 and over. This particular group was selected because they most resemble the population the exchange is designed for. Our methodology allowed us to measure the true experiences of consumers after the first enrollment period ended, and after the dust had settled. We believe this group represents the primary universe for purchasing through the exchanges next year and beyond.
The first surprise this data yielded was that consumer experiences with the exchanges so far have been positive. Despite the intense scrutiny of website glitches, long hold times and frustrating purchase experiences, we were impressed by the number of respondents who say their experiences with exchanges so far has been good. It’s possible that the storm of negative publicity served to lower consumer expectations. It’s also possible the group we focused on, because it is younger than the general population, is more tech-savvy and better able to navigate digital experiences.
This general positivity has important implications going forward as healthcare companies try to leverage word-of-mouth experiences in adding additional customers.
Beyond that, this research produced four conclusions we think might benefit all companies in the healthcare ecosystem. These conclusions provide deeper insights into effective segmenting, product design and marketing strategies.
Avoid the stubborn subset
While the ACA contains a mandate that most individuals must sign up for health insurance and can face a financial penalty for failing to do so, our research indicates that among those who have been uninsured for five years or more, there is still strong resistance. When we asked whether people intended to either definitely or probably buy on the exchange, 32% of those who had been uninsured for five years or less answered yes. Only 12% of those uninsured longer than five years answered the same.
When the question was reversed, their answers were even stronger: 63% of the longer-term uninsured group said they definitely/probably won’t buy, versus 41% of those who have gone without insurance for five years or less.
We believe these people are going to be exceedingly difficult to get on the exchange regardless of product offerings or message, and likely not worth prioritizing going forward.
Up-selling is financially viable
Many insurers have been reluctant to offer tiers of coverage, concerned that they will appeal only to people with greater-than-average heath problems. But our research found that many healthy people—in fact, some of the healthiest—are willing to consider trading up to higher levels of coverage, including Silver, Gold and even Platinum-type plans. In other words, even people with excellent health are interested in learning about more elaborate types of coverage, indicating that there is a great deal of potential for insurance companies to tailor additional packages and polices.
About 18% of healthier people say they would pay more for Gold coverage, compared with 16% of those with chronic health issues.
Consumers are baffled by subsidies
We uncovered large pockets of opportunity for companies that can effectively educate consumers about key insurance issues, such as eligibility for sliding-scale subsidies. It’s an area of widespread confusion. Only 43% of those we surveyed who are actually eligible for subsidies are aware of that, while 21% of those who are eligible believe they aren’t, and the remaining 36% are unsure. Such misunderstanding provides a significant opportunity for companies who are able to intercept and educate consumers early on in their journey.
Millennial and Hispanic consumers offer rich possibilities
As we sifted through our results to look for the best prospects for future enrollment periods, two key groups kept resurfacing – Independent Millennials, and Acculturated Hispanics. For more on targeting strategies for these two audiences, here is the full white paper on this topic.