Michelle Singletary, Columnist for the Washington Post, points out that it’s time to elect a health Care plan. At the end of the year, employees have the opportunity to make changes to their workplace benefits for the next year.

Costly Mistakes in Open Enrollment

During open-enrollment season, most people fail to make a choice but just go with what they already have. Even worse, many employees make costly mistakes. A survey of 2,500 consumers conducted for Aflac finds :
  • 56% of employees estimate they waste up to $750 annually because of their errors during open enrollment, such as electing the wrong level of insurance coverage or choosing benefit options they didn’t need.
  • 61% said they are only sometimes or not at all aware of changes to their insurance policies each year.
  • 89% simply default to the same options every year.
  • Only 16% say they contribute the right amount to flexible spending accounts.

The Fear Factor

A survey by Aetna also found that workers consider it extremely difficult to choose health-care benefits. Employees surveyed said:

  • Health enrollment is the second most difficult major life decision behind saving for retirement.
  • Choosing health-care benefits is more difficult than purchasing a car, making decisions about medical tests or treatments, parenting and selecting other forms of insurance.

What’s the Problem?

The employees surveyed by Aetna said that the reasons they found these benefits decisions so difficult is that:

  • The information they are given is confusing and complicated.
  • There is conflicting data.
  • It’s hard to determine which plan is the right for them.

What Can Health Insurers Do?

Considering how vitally important this decision is, it is truly unfortunate that health care insurance providers have not been able to crack the code in distilling highly complex product information into easy-to-grasp and compelling value propositions.

One of the reasons for this is that health care industry is far behind the curve in customer-centricity. Only now in the wake of health care reform is the health insurance industry beginning to understand that they need to move toward a more consumerist individual retail model. This is vitally important because:

  • “Consumer-driven plans”– Employers are shifting more responsibility onto the individual employee in the form of  in which the employee needs to be more actively engaged in his or her health care decisions.
  • Health care exchanges under healthcare reform require individuals to compare providers online to make decisions about their coverage options.
  • More Medicare coverage options today include traditional Medicare, and plans provided through private insurers including: Medicare supplement policies, Medicare Advantage Plans, and Medicare Part D Prescription Drug coverage.

Since the choices consumers face are complex, and personally significant, Marketers now face the awesome responsibility and challenge of simplifying the decision process for the consumer. Behavioral economics studies have shown that how the enrollment choices are presented make a huge difference to consumers in empowering them to better evaluate their plan choices.

Where’s the Support?

To elect the right coverage for their needs, it is vital that people take the time to calculate their yearly medical expenses. However, Aetna found:

  • 43% of employees rarely or never track how much they spend on out-of-pocket health-care costs.

Marketers clearly need to offer more clear and intuitive enrollment materials. They also need to provide a good marketing media mix. For example, while some people are more comfortable reviewing materials on their own, others prefer 0nline guidance or telephone support. The Aflac survey found that half of employees said they would feel more informed if they sat down with an insurance consultant during enrollment. This points to a great need to improve open enrollment meetings.

Best Practices: Some of the information that Aetna provides can be viewed at www.planforyourhealth.com, including:

Aetna’s research has shown that members who use the Member Payment Estimator may save as much as $170 on out-of-pocket costs for more than 30 commonly selected health care services they can research with this tool.

To help consumers better understand how health care reform impacts them personally, Aetna created the Health Reform Connection website which provides information on the different elements of health care reform.

The Genius of Simplicity

While large health care insurers like Aetna are taking the initiative to create innovative tools to ease the enrollment decision and empower members to make more informed decisions, still the sheer volume of Aetna’s web-based materials can itself be overwhelming, and the danger of overwhelming consumers with too much information remains an issue.
The key is to provide tools and systems that are informational, consumer focused and, most importantly, effectively simplify the consumer decision process. Less is often more. Carmine Gallo in Forbes summed up how important simplicity is to Apple’s success:

Your customers demand simplicity and simplicity requires that you eliminate anything that clutters the user experience.

The key to marketing success is to simplify your customer’s buying process for your products or services, and to simplify your communication messages to one core promise for your key customers.
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