Open Enrollment and the Reluctant Health Insurance Shopper
Many industries have seasonal patterns. If you are a marketer, you know the ebbs and flows of your industry and invest in a significant marketing presence during the peak season. In healthcare, the major season is "Open Enrollment." From now through mid-December, consumers will see a surge in ads for medical groups, hospitals and health plans. Is it worth it?
It should be. Open enrollment consists of three overlapping windows of opportunity:
- Consumers who get health insurance through their employer will have an opportunity this fall to renew or change their coverage for 2019. This selection period, depending on your company, may begin in late August and usually wraps up by Thanksgiving.
- Seniors who have Medicare Advantage or traditional Medicare can change plans during a window of time specified by the federal government. The open enrollment period is October 15 — December 7, 2018, for coverage changes that take effect January 1, 2019.
- For consumers who purchase coverage through one of the exchanges, open enrollment starts on November 1. Those who use the federal exchange, Healthcare.gov, have a deadline of December 15, while some state exchanges have later deadlines.
That means most adults in the U.S. who have health insurance can evaluate their options and potentially make a switch this fall. So it is the peak enrollment season not only for health plans but also for the hospital networks and medical groups that want to persuade you to have them ‘in network.’
The problem is that that most people do not want to engage in comparison shopping for health insurance. In fact, a higher percentage of people will compare and switch auto insurance coverage than health insurance coverage — even though they spend far more on health insurance annually[i].
About 85% of people will just let their current coverage renew. At many companies, the percentage of roll-overs is much higher. Why? In general, people view open enrollment selections as complicated and likely avoid reconsidering options they may not fully understand. Knowledge of health insurance terminology varies. And people have difficulty evaluating the trade-offs between premium and deductible amounts in the context of their tolerance of financial risk. As a result, the comparison shopping behavior so common in other types of considered purchases is less pronounced when it comes to making healthcare-related purchases.
So is investing in open enrollment marketing worth it? It depends. Your competitors are pouring money into the market this time of year, as are other seasonal advertisers for elections, new automotive models, holiday decor and gift-giving. Rates for traditional and online paid media will climb significantly.
Healthcare requires both upstream marketing as well as direct-to-consumer seasonal marketing to convert prospects. The success of open enrollment depends on the efforts you have undertaken in the months leading up to peak season. If your conversion elements are not in place — effective online targeting, an easy to navigate website, a trained customer service team and a significant ground game — then you may be paying a premium that will make your return on investment metrics look even worse.
Note: [i] In 2014, 39% of auto insurance customers compared coverage and 29% switched carriers as a result, according to J.D. Power. That same year, only 15.8% of commercially insured adults who retained coverage made any sort of switch for all reasons (5% switching products within a carrier; 10% switched carriers; 2.5% dropped coverage), according to ACAView. That year the average annual cost of car insurance paid was $907.38 in 2014 according to Quadrant Information Services. The average annual contributions for health insurance for a single adult totaled $6,025, according to Kaiser Family Foundation
Michael Crawford became interested in healthcare listening to the conversations around the patio table as his parents and their colleagues talked about work. For the past 30 years he's used his marketing expertise to help medical groups, hospitals and health systems connect with consumers, physicians, employers, brokers and health plans. He advocates for a strategic approach to marketing, audience-based communications, coordination between marketing and customer service functions, and early inclusion of the marketing discipline when planning services. His work has earned more than a dozen awards over the past few years. He’s no stranger to healthcare reorganizations or healthcare reform, from the failed effort during the 90s to the implementation of the ACA to today’s efforts at repeal. His blog, Healthcare Marketing Survival Guide, offers advice for B2C and B2B healthcare marketers trying to chart their course during uncertain times. Connect with him via LinkedIn or follow him on Twitter @health_crawford.