As the health insurance marketplace evolves to a more consumer-oriented model, a number of large health plan providers have taken steps to become more competitive, lower medical costs, increase market share and create innovative consumer-directed products.
In the marketing arena, one significant trend that has emerged in this changing landscape involves the application of licensed “tele-agents” to sell policies directly to consumers over the telephone and the Internet.
Tele-agents can be highly effective when plans are sold directly to the consumer.
With employers trimming workers’ benefits, an increasing number of individuals are purchasing health coverage to supplement or replace employer-based coverage that is insufficient or unaffordable. At the same time, many large companies are now cutting back on health care benefits provided to retirees. As a result, many health plans have sought to capitalize on this trend by actively growing their direct-to-consumer marketing capability.
Medicare Part D and Medicare Advantage plans also lend themselves well to the tele-agent model as, increasingly, the consumer rather than the employer is making the decision to buy the plan of his or her choosing.
Plans cite 4 main reasons why tele-agents make sense:
1. Cost.
The telephonic/Internet underwriting sales channels are relatively inexpensive. With plans becoming more competitive, it is no longer cost effective for insurance providers to pay traditional agents an additional 20% to 40% in commission to sell or service these low-margin accounts, compared with tele-agents. Savings with tele-agents are also achieved through lower cost of sales.
2. Mass Distribution.