Changing Landscape, New Opportunities
With implementation of the Patient Protection and Affordable Care Act (PPACA) continuing at a rapid pace, it’s easy to get lost in the proverbial weeds while preparing for compliance.
In this column, we invite you to take a step back with us and view the changing landscape from 10,000 feet.
Carriers, health care professionals and hospitals are all experiencing changes in how they provide products and services. Employers are faced with a dizzying array of choices as they change benefit plans to comply with regulations. Consumers are experiencing profound changes in how they purchase products and services, what options are offered to them and what their potential financial exposure could be. Agents, brokers and consultants are dealing with changes in their role and seeking new ways to continue to be viable and successful at what they do so well.
At Cigna, we strongly feel change represents opportunity. For us, opportunity always revolves around strengthening our relationships – with our clients, brokers, health care professionals and customers. One of the ways we do this is by helping them navigate the changing health care landscape, and providing them with the right products, services and assistance they need at the right time.
Today we’d like to focus on brokers, employers and individuals. In doing so, we reflect on the following:
- In 2014, new regulations and taxes will increase medical insurance premiums, especially in the Individual and Small Group markets.
- As employers sponsoring group plans look to mitigate rising health care costs, they may increase deductibles and out-of-pocket expenses, leaving employees with higher financial risk if they cannot afford the up-front fees for care. They may look to employers to provide group or individual voluntary supplemental products, particularly critical illness and accident policies to cover higher deductibles when unforeseen medical expenses are incurred.
- Consumer-centric product solutions are needed to help protect customers from financial risk and provide high quality coverage options to address their unique needs.
- In other countries where medical coverage is mandated, supplemental products are very popular to help fill gaps in coverage options. They are tailored to protect a customer.
Knowing that individuals will have an acute need for expert help and guidance, we see the role of brokers, agents and consultants becoming more, not less, important.
They are uniquely positioned to help individuals navigate the complexities of our changing environment and purchase the right medical and supplemental products to address their highly personalized needs.
Regardless of the customer’s situation, there is a need for creative medical and supplemental product solutions, bundled together to help provide more personalized coverage and protection against financial exposure and risk. Customers will need help understanding what health plans will cover and what they will be expected to pay. They will also need help understanding if they are subsidy - eligible, and if there are supplemental products in the marketplace that can help them reduce their risk due to illness or injury.
Consumers may not realize that rather than come up with a $5,000 deductible, they can purchase a $10,000 critical illness policy that would cover the deductible, plus leave $5,000 to use for other care-related expenses – for instance, to cover the gap between disability and regular pay.
Quite simply, these customers will need the expert guidance and education that agents are uniquely positioned to provide. How these products are positioned will vary – so it will be up to agents, brokers and consultants to understand the complexity of the shopping experience and provide a guided approach to purchasing needed solutions.
Individuals receiving their health benefits through their employer may also seek the financial protection offered by supplemental benefits, particularly as employers shift greater deductible and co-insurance responsibility to employees. Employer-sponsored supplemental benefits provide an easy, low cost way for employees to obtain additional insurance protection and create additional good will for the employer.
To truly be successful in helping individuals and businesses learn about their options brokers should carefully consider:
- Whether the medical and supplemental products are bundled together in a way that creates a true coverage package. Packages should be tailored to address customers’ lifestyles, needs and coverage amounts. For instance, a family with three young children involved in sports may experience numerous health care professional visits for injuries, illnesses and other non-preventive care. A supplemental policy can help cover the deductibles, copays, etc.
- How well does the carrier interact with customers to guide them through the complexity of product and service offerings when new options are introduced into the marketplace? Strong communications are essential to help customers minimize risk and exposure.
- Whether there are any "gotchas" in the supplemental benefits package that are not consumer-centric, but serve to affect premium or carrier risk. It’s important to know exactly what and for how many instances the supplemental policy will pay. For example, some critical illness plans will cover only one major acute care episode, but our plan will cover multiple critical care incidents up to the dollar maximum. All supplemental products are not created equal, so working with a consumer-centric carrier delivering supplemental and medical products that value the consumer ensures that the consumer (1) knows what he or she is purchasing, (2) is sufficiently protected and (3) receives the value they expect.
At Cigna, where our message "GO YOU" reinforces our total commitment to customer-centricity, we put our beliefs into action. Our purchase of Great American Supplemental Benefits (now Cigna Supplemental Benefits) in August 2012, illustrates this commitment.
The acquisition gave Cigna an immediate national footprint in Medicare supplement and individual supplement insurance space with the ability to offer products such as accident, critical illness, heart and cancer plans. This is in addition to the group voluntary products (life, LTD buy-up, voluntary AD&D, and critical illness) that we’ve offered to large employers for years. We are excited to offer a comprehensive suite of supplemental products.
As we continue to develop customer-centric product solutions that serve our constituents in this ever-changing landscape, you can feel confident that Cigna remains committed to addressing individual customer, employer and broker needs, and is taking every opportunity to assist you as we navigate the health care reform waters together.