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How to get those special PPACA sales feelings

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The nap period insurance market looks as if it should be a great target for traditional agents and brokers.

The insurers and regulators implementing the Patient Protection and Affordable Care Act (PPACA) restrictions on medical underwriting tried to use an open enrollment calendar system to keep antiselection forces from tearing the new system apart.

To discourage healthy people from waiting until they get sick to pay for insurance, PPACA implementers let consumers buy major medical coverage on a true guaranteed-issue basis for only a few months a year, during an annual open enrollment period. During the rest of the year, the nap period, consumers who want to buy major medical coverage must qualify for a special enrollment period (SEP). They have to have moved, had a child, married, or gone through some other life change.

Consumers who cannot qualify for SEP must buy a product other than major medical coverage, such as short-term health insurance or critical illness insurance, or wait until the next open enrollment period to get covered.

The nap period market is complicated, and many of PPACA public exchange programs seem to have done a poor job of serving the consumers who qualify for SEPs. One sign that public exchange SEP sales were low is that public exchange managers published little 2014 public exchange SEP activity data.

The lack of major medical product access gives producers a chance to sell non-PPACA gap-filler products that may pay solid commissions. But the little drips of data available suggest that the 2014 nap period market was also disappointing for many sellers outside the public exchange system. 

The numbers of consumers who tried to buy coverage during the first PPACA nap period seems to have been smaller than expected, and the percentage of would-be SEP shoppers who were actually able to qualify for a SEP seems to have been low.

Some top health insurance marketers argue that agents and brokers should be able to find ways to greatly expand nap period sales as they come to understand it better. 

See also: View from PPACA World: Jeff Smedsrud

For a look at ideas for increasing nap period sales, drawn from interviews and recent survey and data analysis reports, read on.

 Smiley ball

1. Smile: The PPACA exchange system helped show why you matter.

Just two years ago, PPACA public exchange builders who had never tried to sell insurance talked as if most consumers in the individual health insurance market would buy coverage through a smoothly running, fully automated Amazon for health insurance, with little or no live-human involvement, for, roughly, free.

Today, many of the organizations that tried to run “volunteer” or paid nonprofit enrollment operations are complaining that exchange payment levels and requirements are unrealistic. The more successful exchanges are getting more and more of their enrollees from agents and brokers.

Earlier this year, the Henry J. Kaiser Family Foundation sponsored a survey of 804 U.S. adults who had purchased their own health insurance. Foundation analysts found only a slight drop in the percentage of participants who had purchased their coverage through an agent or broker, to 27 percent this year, from 29 percent a year ago.

Some consumers said they had received some help from a live human when buying their health coverage: 33 percent of those consumers said they had received help from an agent or broker this year, down just slightly from 34 percent in 2013.

See also: PPACA exchange update: Distribution is hard

Curious dog

2. Think about why consumers are shopping for health coverage today.

Ryan Smolek, a vice president at GoHealth.com, said in an interview that about 30 percent to 40 percent of the consumers shopping for health coverage now seem to qualify for SEPs.

Why are the others trying to buy health coverage now, when getting what they want is so complicated?

In some cases, Smolek said, “they just weren’t aware of the enrollment period.”

In other cases, the consumers either dislike their employer-sponsored coverage or want to get supplemental products to fill in gaps in coverage, Smolek said. 

See also: If you like your health insurance plan…

Seasons

3. Consider the possibility that health insurance tastes may now be seasonal.

Smolek said he thinks that, in PPACA World, the healthiest major medical shoppers may be those who buy coverage toward the end of the open enrollment period, or during any tax-related extension periods, mainly because they are worried about having to pay the PPACA penalty imposed on many people who lack what the government classifies as minimum essential coverage (MEC).

Consumers who are buying coverage are more aware of why they need health insurance, Smolek said.

If those consumers can get through medical underwriting process for non-PPACA products such as short-term health insurance, they may be more likely than open enrollment period shoppers to want richer, higher-priced products, Smolek said.

See also: Analyst: PPACA enrollment extension could hurt insurers

Image: GI image/Anika Salsera

Guy waiting by the phone

4. Make working with you easy.

The Kaiser analysts found that many consumers continue to complain that simply setting up a public exchange account is difficult. 

About 35 percent of exchange plan users said setting up an exchange account had been somewhat or very difficult. Despite media reports about improvements in public exchange operations, the percentage of users complaining about setup problems is the same as it was a year ago.

Sally Poblete, chief executive officer of Wellthie, said in an interview that making a website and any attempts to communicate through other channels as simple as possible is critical.

“For consumers, insurance is like a foreign language,” Poblete said.

The great thing local agents and brokers have going for them is that they are flesh-and-blood natives. They don’t have to hire people in other countries to provide that live-human touch; they can meet with consumers in a drug store or simply pick up a phone and speak with a local accent, without spending weeks training with an American accent coach.

Purple planet

5. Recognize that, even for consumers who do qualify for SEPs and want PPACA-compliant major medical coverage, the exchange market and the off-exchange market may be different planets.

HealthPocket analysts compared the cost of health plans sold solely through the public exchange system to plans sold both through the exchange and off-exchange markets. 

The analysts found that the cost of the exchange-only plans were more expensive, possibly, partly, because insurers designed the exchange-only plans based on the assumption that many consumers would be using PPACA tax credit subsidies to help pay for the coverage.

Kev Coleman, head of research at HealthPocket, says in a commentary that insurers may have assumed that many consumers in the off-exchange market would be earning more than 400 percent of the federal poverty level and paying the full cost of coverage out of their own empty pockets.

“Off-exchange consumers are more likely to be unsubsidized and may be more price-sensitive than on exchange consumers who enjoy premium subsidization,” Coleman says.