The
Aite Group report highlights four major trends in the individual market related
premium collections payment regularity, inbound calls, recurring payments, and
mobile solutions.
September 03,
2019 - Only half of individual health insurance market members pay
their premium bill on time, potentially pointing health plans toward digital
payment tools for premium collections, finds a recent Aite Group report, provided to HealthPayerIntelligence.com by
email.
“What is happening in
the individual market should not be drowned out by the noise of uncertain
policy decisions on ACA,” Michael Trilli, research director at Aite Group, said
in a press release. “This market is churning
and will only get stronger, meaning the time is now for insurers to go on the
offensive and digitally transform the premium payment experience.”
The report drew on
the survey responses from 2,425 consumers, over 30 percent of whom paid their
premiums to the health plans directly, by means of, for example, a Medicare
Advantage plan or the Affordable Care Act’s Exchanges.
As individual health
insurance market premiums are projected to rise, health plans
should look for ways to help streamline the payment process for members.
The study identified
four major trends in the individual health insurance market in payment
regularity, the amount of time spent communicating with members, recurring
payments, and mobile technologies used for streamlining payments.
First, the study
found that health plans are struggling with members’ irregular payment patterns.
Barriers to
consistent cash flow, such as members forgetting to pay their premium or not
having the funds, are driving this trend. As health plans look to create a
rhythm to their payments that is less erratic, they are turning to new payment
technologies.
Forty-three percent
of those ages 25 and 40 failed to pay a bill on time either because they did
not have the funds available or because they forgot.
The results can be
financially significant for both the health plans and their members.
Delinquent, late, or past-due payments may result in the health plan canceling
the account.
Members and health
plans also spend time and funds addressing payments with member-initiated
calls.
Thirty-seven percent
of members initiate a conversation with their health plan a couple of times per
year. Only 11 percent reported never having to contact their health plan,
whether by email, chat, phone, or email, regarding their premium bill payments.
Younger people were
more likely to jump online or on the phone to reach out to their health plan.
This coincides with a trend indicating that those who were delinquent on
payments or who fail to pay their health plan were more likely to contact the
health plan.
Health plans have
begun to automate payments or set up recurring payments as one strategy to
address these financial challenges, the survey showed.
Seniors appear
especially inclined towards recurring payments, though they are not the only
ones. Of individual policyholders, 57 percent choose to make recurring
payments.
This approach is
designed to establish a known payment amount and payment period that prevents
members from having to inquire regarding either situation.
The remaining 43
percent pay for their premium in individual, one-time payments.
Medicare Advantage
members in particular preferred setting up an automatic payment than members
ages 18 to 24 and 41 to 64. This statistic took the researchers by surprise.
However, they reasoned that recurring payments work well with seniors’
budgeting needs.
Recurring payments
may also help explain why seniors are more likely to pay their bills on time.
Among older members between 55 and 64 years old, 64 percent claimed they
consistently paid their bill. In general, 62 percent of those with zero late
payments had also set up a recurring payment.
Most individuals pay
their premium bills either immediately when they receive the bill (37 percent)
or around payday (30 percent).
The report suggests
that health plans consider age as a determining factor in how individuals will
respond to their bill and, consequently, in how health plans should assist
members in meeting payment deadlines.
Lastly, the study
found that mobile technologies are enabling greater member engagement.
Over eight in ten of
those who pay health plans directly own a mobile device, compared to 71 percent
who own a laptop, or 57 percent who own a tablet.
The report suggests
using electronic reminders, a health plan payment platform, starting a health
plan payment card, instant payments, and payments by text. These digital
payment options can decrease costs and streamline the payment process.
Electronic reminders
helped 62 percent of participants ensure that they paid their bills in a timely
fashion. Just as transparency is key in notifying
patients of provider bills, transparency about the bill amount and the due date
is essential to successful electronic alerts.
Health plan payment
platforms enable self-service which decreases the number of inbound calls,
although in order for platforms to be effective health plans must make sure
that members are aware of the platform and enroll.
Payment cards appear
to be a strong method for payment among members, as 37 percent use a payment
card for their bill transaction.
Real-time or instant
payments, while not well-known among members, have helped to set apart
businesses, banks, and other institutions that offer the service. Of those who
have used the tool, 48 percent found it extremely helpful in paying their bills
on time.
Text payments, like
instant payments, are not pervasive and have low recognition among members.
However, the report recommends it as a way to allow members to pay immediately
by responding to the message or clicking on a link in the text that leads to
their payment options.
These solutions
demonstrate that immediacy is the top priority for and in the best interests of
health plans and members alike. A mobile-enabled payment structure can raise
cash flow, decrease expenditures, and further member engagement.
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