By Dayne Williams, Chief Executive Officer, PlanSource
The Affordable Care Act offers consumers a much wider array of health care choices. In the past, employers handed employees a packet of paper with pre-selected options for health care and benefits. Now a whole new world is opening up for employees to shop and compare all kinds of plans in online exchanges to assemble a personalized package that includes both traditional and non-traditional benefits.
All this choice means consumers face more complexity: health insurance plans are not easy to understand, and the ACA doesn’t make it any easier. For insurance carriers and brokers, more choice means more competition. Carriers will see their products displayed side-by-side with competing products on exchange marketplaces. Virtually every carrier in the country – medical, voluntary or ancillary – is right now trying to decide which exchange (or exchanges) they should offer their products on, or whether they should perhaps build their own exchange. Brokers are pondering the same question. All are wondering how best to compete in this evolving game. The winners will be those who make it easiest for consumers to shop and enroll online.
For larger brokers and carriers who want to be in the enrollment business, the key to success is to get to market fast with a beautifully designed consumer experience that addresses the needs of their unique markets and differentiates themselves from the competition. This should be coupled with a technology back-end that makes it easy for everyone in the ecosystem – carriers, brokers, TPAs, employers and employees – to do business together.
Building the back-end is a complex undertaking, and an end-to-end shopping and enrollment platform with all the capabilities for business rule configuration and transaction processing requires tens of millions of dollars and several years to fully develop. Furthermore, as we all know, the project is never done. The regulatory environment and consumer expectations will continue to change, requiring substantial ongoing investments. But, this need not be a barrier to entry. There is a better way.
Companies can design a front-end experience that reflects their brand and user experience needs and use APIs (application programming interfaces) to connect to an existing back-end processing engine. This is a great option for large insurance carriers, brokers or even HCM companies that have already invested in consumer-facing technology and want to maintain control of the user experience without waiting years to build out the full solution.
In addition, this can be done for about one tenth of the budget, offering speed to market without compromising the consumer experience. If you don’t have the resources or desire to develop a custom front-end, you can buy a complete exchange platform – front-end and back-end – and differentiate your offering through the products that you sell.
The main point here is to focus on the consumer experience. There is a lot of technology innovation going on in the area of decision support that you can bring to bear on creating customer delight. Here are some things to consider:
Ease of use
With the first generation of decision support tools, buyers had to fill out lengthy questionnaires in order for back-end analytics engines to evaluate their health care needs, tolerance to risk and recommend a plan. That’s not a user-friendly experience, and shoppers today won’t tolerate long forms if they can avoid it. The next generation of tools can bring in third-party data, such as claims and prescription information, to lighten the burden on the buyer, shorten the process and make better recommendations.
De-mystifying the SBC
The ACA mandates that every plan has to have a standardized Summary Benefits Comparison (SBC), such that consumers can make apples-to-apples comparisons between plans. The government dictates what the SBC looks like – a big grid with numbers on it and a lot of acronyms: HMO, PPO, ACO, etc. For the most part, the consumer doesn’t understand how to read it, or more importantly, what it means. Translation is needed. Providing tools to help buyers understand the ramifications of different plans will make it a lot easier for them to shop and compare on your platform.
Surfacing the network
Network choice also has big ramifications. Every plan has an in-network cost and an out-of-network cost that’s much higher, so obviously consumers want to be able to easily look at the network before making their choice. The ACA has also created an additional choice of health care network called an accountable care organization (ACO). If people have doctors who are important to them, it’s important to know, “Is my doctor part of this network or ACO?” It should be really easy for them to get that information while they’re shopping for plans.
Delivering complex information in a way that’s easy to understand and making it dead simple for employees to enroll is the winning formula.
This is not to say that the back-end processing engine is not important. It is, and it has competitive considerations of its own. (Read more about this topic in our recent blog post, Can Private Exchanges Deliver on the Back-end?) But why build when excellent transaction processing and business rules engines are already on the market today? For carriers and brokers pondering whether to buy, build or join, it makes sense to buy the back-end and focus resources on creating a front-end experience that delivers a unique, competitive value proposition for your target audience.