The Face of the Online Health Insurance Shopper is Revealed

With the number of employers offering health insurance to their workers declining, the group health insurance market is shrinking. Meanwhile, the individual market has exploded to $115 billion a year. This is according to Norvax, an online health insurance technology company.

Norvax recently completed an analysis of nearly half a million people who have requested a health insurance quote or to be contacted about health insurance. What they found is that while there is a growing number of people looking for insurance online, only about 5-10 percent are really confident enough to complete the purchase online. The remaining 90-plus percent want guidance and are turning to insurance agents and brokers for advice and guidance.

To answer the needs of consumers seeking easy access to individual health insurance, Norvax launched an online shopping site, GoHealthInsurance.com, which offers side-by-side plan comparisons from more than 70 carriers, plus live access to a network of more than 10,000 experienced agents who can assist customers in finding the insurance plan best suited for their individual needs.

To date the typical online insurance shopper using the Norvax site is a single woman from the south who is in her twenties and who does not currently have health insurance.

Insurance agents are also seeing value in web-based marketing because they are able to get a better picture of who the customer is and how they prefer to look for and receive information making it easier for them to tailor the way they interact with their customers.

Health Plan Innovation Take: Norvax is an innovator in the way health insurance is being marketed in the US.  The health insurance market is rapidly becoming an individual market and individuals are going to use the internet to find the plan that best meets their needs and their budget.

Health care proposals discussed by both of the presidential candidates and by many state legislatures would give further impetus to individuals shopping for health insurance on their own. This hybrid model of combining an on line shopping experience with the guidance of an experienced broker promises to be a key element in helping people make the transition from group to individual health coverage.

Now all we need to do is figure out a way to convince the young “invincible” males in the population that they need to have health insurance, too.

Kaiser Health Tracking Poll: It’s the economy, stupid.

The October Kaiser Health Tracking Poll: Election 2008 is out and it is no surprise that health care reform has dropped to a position well behind the economy and the war in Iraq as issues voters want candidates to address.  The latest national survey of 1,207 adults found for the first time since the Foundation began this latest series of tracking polls in March 2007, that one issue was volunteered by more than half of voters as the main thing they want to hear the presidential candidates discuss – It’s the economy, stupid.

The survey showed that the economic crisis that has impacted Wall Street and Washington this week is creating some real pocketbook problems for large numbers of Americans.

  • 63% reported a “serious” problem with at least one of seven financial hurdles
  • 39% reported problems paying for gas
  • 33% reported “serious problems” getting a good-paying job or a raise
  • 30% reported problems paying for health care and insurance (up from 24% last month)
  • 21% reported difficulties paying for housing
  • 20% reported problems paying for food

Health Plan Innovation Take: While fewer Americans are citing health care as the major issue that they are looking for candidates to address, it is clear that this is an issue that remains just below the surface. As the economy continues to worsen and unemployment levels climb, health care is becoming just another of the basics, along with housing, gas and food, that consumers are struggling to fund.

This latest wave of high unemployment will provide fuel to those at the state and national levels who want to see employers take a less active role in providing health insurance. Look for more states to take a hard look at the Massachusetts model of mandates, and cooperation between state run agencies and private health plans.

Mandatory Health Insurance Myth Buster

It is now January 5th, and time to climb back into the saddle and start looking once again for health plan innovations.

One of the so called innovations that we are hearing about from some of the leading presidential candidates is a federal mandate which would require everyone not in Medicaid or another government program to buy health insurance. In an op-ed piece in yesterday’s Wall Street Journal, Betsy McCaughey, a former lieutenant governor of New York, and an adjunct senior fellow at the Hudson Institute, writes that many of the augments used to promote mandatory coverage are based on “myths.”

She then goes on to systematically debunk, as myths, three arguments she says are used often by mandate proponents:

  1. It’s fair to make everyone pay the same price for health insurance.
  2. Lack of insurance forces people into the emergency room for routine health care.
  3. A system that leaves 47 million Americans without health care is a moral disgrace.

In the process, she argue that mandating the 56% of the uninsured who are adults aged 18-34 to buy insurance at prices that are geared not to reflect their risk, but to help subsidize older, more at risk, buyers is grossly unfair. (A point that I note has distinguished Senator Obama’s plans from Senator Clinton’s and may, in some small way, play a role in his popularity with younger voters.)

As for emergency room use, she says that federal data (the Medical Expenditure Panel Survey provided by the Agency for Healthcare Research and Quality) show that the elderly are most inclined to go to the emergency room, though they are universally covered by Medicare. Other repeat users, she points out citing an Institute of Medicine study, are the “frequent flyers” who are in the ER repeatedly because of mental illness or substance abuse. Enacting a mandate isn’t going to eradicate the behavioral problems that land them in the ER.

Finally, the moral issue of having 47 million uninsured in this country. That does sound awful, but here are some fact that Ms. McCaughey included in her piece that changes the picture quite a bit.

“According to the Census Bureau, of the 47 million uninsured, nearly 10 million have household incomes of at least $75,000. They probably can afford coverage but have chosen not to buy it. Another 14 million of the uninsured are already eligible for government programs such as Medicaid (for low income adults) and the State Children’s Health Insurance Program (for children) and simply need to sign up.”

That leaves about 23.7 million people — some citizens, others newcomers — who cannot afford coverage.

Now that is seems like half of the problem has been solved — or is really not a problem — does a mandate still seem like such a good idea? Or, does it make more sense to go after the problem of how to provide coverage for uninsured immigrants and those who, for what ever reason, are falling though the safety net of existing government programs?

Thanks to insightful pieces like the one written by Ms. McCaughey, we can take some of the emotionalism out of the debate, look at the facts, and then develop innovative solutions based on reality, not myths.

 

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Control, Choices, and Greater Industry Competition

Presidential hopeful, John McCain, today revealed his thoughts on how to reform the U.S. health care system. Though not fully fleshed out, the concepts are market-driven health plan innovations that deserve some discussion.

His ideas revolve around giving people more control and more choices while fostering greater industry competition in hopes of lowering costs and improving services.

McCain introduced his plan during a speech to the Rotary Club Des Moines and according to published reports his plan calls for:

_Allowing people to buy health insurance nationwide instead of limiting them to in-state companies, and permitting people to buy insurance through any organization or association they choose as well as through their employers or directly from an insurance company.

_Providing tax credits of $2,500 to individuals and $5,000 to families as an incentive to help them buy insurance. All people would get the tax credit even if they get insurance through work or buy it on their own.

_Supporting different methods of delivering care, including walk-in clinics in retail outlets across the country, and developing routes for cheaper generic versions of drugs to enter the U.S. market, including allowing for safe importation of drugs.

Allowing people to buy health insurance nationwide is an idea that the Health Plan Innovation Blog can applaud. Current regulations at the state level protect the relatively few carriers who register products in any given state. Allowing carriers to file plans nationally will give consumers more choices, increase competition, and lower prices.

Next, providing tax credits for individuals who buy insurance on their own, or through work, is a true innovation. Why should only employers get a tax break for health insurance? Why not self employed individuals? For that matter, why not anyone who might want to buy insurance for themselves or their family regardless of what might or might not be offered by their employer?

Lastly, the idea of supporting different methods of delivering care, including walk-in clinics in retail outlets across the country, is an innovation that will encourage competition, pricing transparency, and consumerism — all components needed to get health care delivery into a rational framework governed by market forces.

McCain, in releasing his health plan, has demonstrated an understanding of the industry and evolving trends that has not been present in the health care plans offered by most of the other presidential candidates, regardless of party.

 

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Be More Like America

In looking for innovative health care solutions, I was drawn to an op-ed piece that Republican presidential candidate Rudolph W. Giuliani published in the Boston Globe back on August 3, 2007. In a piece titled A free-market cure for US healthcare system he writes, “Instead of being more like Europe, we need to be more like America.”

Giuliani goes on to write, “America is best when we solve our problems from our strengths, not our weaknesses. Healthcare reform must be based on increased choice, affordability, portability, and individual empowerment.”

Then he strikes at the heart of the matter — tax fairness. “We need to begin by bringing fairness to the tax treatment of healthcare. The current tax system penalizes millions — including the rising ranks of the self-employed and 40 percent of employees at small firms — who pay for insurance on their own and receive no tax benefit.”

The candidate begs the question, why is it that Americans without employer-based insurance, or those who would rather have individual coverage, cannot enjoy the same tax benefits as the 175 million Americans with employer-based coverage?

Giuliani proposes a new tax-free income exclusion up to $15,000 for Americans without employer-based coverage. Any amount a family pays less than $15,000 — for individuals, less than $7,500 — could be put tax-free into a Health Savings Account. This, he says, would create a powerful incentive for more Americans to own their private health insurance — making it portable instead of dependent on an employer.

The conclusion of Giuliani’s article states, “The future of America’s healthcare system lies in free-market solutions, not socialist models. We can increase individual choice and decrease costs by increasing competition, encouraging innovation while always compassionately caring for people in need. That’s the American way to reform healthcare.”

To read the article, click here.

P.S. Thanks to the guys at the HSA Truth blog for the tip about this article.

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Mandates or Innovation?

As the presidential political campaigns heat up and more of the discussion centers on health care, we are going to be hearing a debate about mandating health insurance. Many politicians are promoting a health care system whereby the government would require individuals to purchase health insurance just as states currently require auto insurance coverage.

Greg Scandlen the president of Consumers for Health Care Choices, a national membership organization based in Hagerstown, Maryland, and an expert in Health savings Accounts (HSAs) has published an interesting article on the subject of mandates. The piece can be found on the Heartland Institute website and is entitled: Don’t Mandate: Innovate

Here is an excerpt:

Failed Mandates

We have already seen that innovations such as Health Savings Accounts (HSAs) will appeal to market segments that did not find value before. Approximately 40 percent of the people who have purchased HSAs in the non-group market were previously uninsured.

But HSAs are only one of many possible innovations in health care financing. Mandatory coverage short-circuits the vital process of innovation in a competitive market.

Further, mandatory coverage simply doesn’t work. Virtually every state currently mandates auto insurance coverage, and the number of uninsured motorists is very similar to the number of people without health insurance.

In 17 states, the rate of non-insurance for auto (which is mandatory) is higher than for health insurance, which is not mandated.

To read the whole article click here: Failed Mandates

 

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