Insurance storefronts bring big business

Mike Augustine, of Greenville, S.C., recently had some errands to run at his local shopping centers: buy some groceries, pop into a mobile phone retailer, pick up some dry cleaning. And lastly, he had to stop by the health insurance store to shop for a better plan.

The new BlueCross BlueShield brick-and-mortar retail store at the Magnolia Park strip mall staffs five licensed agents, prepared to help customers — by appointment or walk-in — navigate the new rules of health care reform, and to buy plans as they would electronics or office supplies.

Though Augustine has not changed his plan, he says the visit was helpful.

“It was a good opportunity to speak with someone face-to-face, not sitting on hold on the phone or looking online through a million plans that make little sense to me,” he says.

In shopping centers and on busy main streets across the country, health insurance storefronts are popping up, sandwiched between clothing shops, drug stores and home goods retailers. Though the storefronts have existed for some time, excitement and anxiety over the Patient Protection and Affordable Care Act (PPACA) have prompted an explosion in the retailization of health insurance, with many carriers offering in-store services that go beyond basic customer service — blood pressure checks and educational seminars, for instance.

Many compare themselves to banks, or to hands-on retailers like Apple, offering Genius Bar-like kiosks with on-the-spot problem resolution.

What they are offering is an experience that puts a face on the organization.

Filling a niche

Tom Paul, UnitedHealthcare’s chief consumer officer, says that while the stores have been many years in the making and are not a direct result of changes in health care, business has picked up since PPACA became law.

“We can see, in certain settings, there is a definite need for personal interaction,” he says. “Where we have seen a growing need is particularly where consumers may have a concentrated time period to assess their situation and make decisions. They look to us to get through an enrollment period and make an enrollment decision. In some cases, with language or economic barriers, having a store that they can walk into is the best way for them to get engaged — in a physical space.”

Minnesota-based UnitedHealthcare — the country’s biggest health carrier — is opening outlets across the United States. One of its most recently opened stores, in Queens, N.Y., offers help in the eight languages and Chinese dialects spoken in the neighborhood. Another, inside a retirement community in Florida’s Sumter County, concentrates on its elderly residents.

“We’re looking to address a broad spectrum of consumer needs in specific cultural or socioeconomic settings — some of the centers may have social workers on staff, for instance,” Paul says.

A shift in the market from group plans to individual plans has also created new needs for clients, says Pete Mittleholzer, the market leader for a six-month-old store in Austin for Bernard Health.

“The majority of people have been getting insurance through employers, or a spouse’s employer, or a parent’s. But as premiums increase year after year, it becomes harder for employers to offer health plans,” he says. “Meanwhile, a lot of smaller employers are finding that reimbursing can be cheaper and can be a better fit. So, for 30 employees, having one or two plans for everyone is not as beneficial as having a different plan for each employee. For them, it helps to meet face-to-face to work that out. Clients hear from their brokers maybe once a year, sure. But they also like meeting face-to-face with advisors in the store, on their terms.”

A key difference between in-store advice and dealing with a broker is the fee structure, he says.

“Our advisors in these stores are salaried, and I think that’s important. When you’re trying to find a plan, you know that the person you are talking to is not going to make any more money or try to upsell anyone,” Mittleholzer says. “We think of it as shopping for the right health plan — less like buying car insurance and more like dealing with a tax advisor.”

Some concerns