Shopping for healthcare has become a frightening experience for 2 million exchange eligible consumers. Although enhancements were made to federal and state exchanges call centers and online platforms, the experience they offered was far from “best-in-class”. This was especially so for Hispanic and Millennial (ages 18-34) eligibles, who are facing a range of enrollment obstacles that go beyond the now infamous Obamacare site glitches. The lack of truly culturally competent channels for segments with limited healthcare literacy, and the lack of clear explanation of benefits for the newly eligible, have drastically impacted the proportion of Millennials and Hispanics enrolled in ACA exchanges by the deadline for 1/1/14 coverage.
Despite Hispanics’ higher uninsured incidence and higher expectations of the healthcare reform, Hispanics only make up a miniscule fraction of the growth thus far. The slower than expected enrollment has prompted grave concerns to the healthcare industry as both Millennials and Hispanics are critical to the viability of the reform. However, SSG experience has demonstrated that balancing younger families who will utilize the system less against families with conditions prompting higher healthcare utilization costs takes much more than a traditional lifestage segmentation approach. Effective Growth Leaders apply wellness mindset segmentation models that discern individuals with healthier outlooks who are more likely to lead healthier lifestyles, preventing the most prevalent chronic conditions in the overall population. Unfortunately, many Millennials are ‘unhealthy time bombs.’
Although the Obama administration has not released a full analysis on the estimated 2 million who enrolled in exchanges nationally, California can be considered a best case scenario indicative of what might have happened more broadly.
- To better illustrate this gigantic enrollment gap, the Hispanic exchange eligible potential in Los Angeles, after discounting for undocumented and accounting for IFP covered and uninsured only within the 139-400 FPL, amount to a bit over 1 million or nearly half of the exchange eligible potential, according to Santiago Solutions Group (SSG) analysis. This compares with merely 12,781 Hispanics enrolled through Covered CA in the first 8 weeks (Oct. 1-Nov. 30), or only 1.3% of Los Angeles’ estimated Hispanic exchange eligible prospects. Furthermore, actual exchange enrollments completed in Spanish language represented only 34% or 4,364 of total Hispanics enrollments as opposed to an estimated 547,804 Spanish Dominant exchange eligible opportunity in LA, signaling a deeper acquisition calamity. That’s right, Hispanic efforts have underperformed by a long shot, achieving less than 1% of the segment exchange potential.
- As far as Millennials (18-34) enrollments, Covered California also under-delivered to the potential. By the end of November there were only 20,390 Millennials enrolled in the exchange in the entire state of California or 24% of all subsidy-eligible enrollments, out of a potential opportunity of about 1 million in Los Angeles alone, per SSG analysis. Certainly, as in any other acquisition effort directed at Millennials in the largest states, the fact that 3 in 5 Millennials in Los Angeles are Hispanic heightens the need to address nuances while finding synergies for coordinated common solutions to both segments.
Why are Millennials and Hispanics not meeting enrollment expectations thus far?
Per an on-going assessment by SSG, what seems as procrastination is actually a painstaking trade-off decision making approach yet to be reconciled by most Hispanic and Millennial exchange eligibles. Consider the following actual scenarios:
- A Millennial California family of 5 with income of $60K (200-300% FPL) was recommended Enhanced Silver 73 through Covered CA, which has about 8 coverage options, (from HMO to PPO) starting ranging from $314 for basic coverage up to $466 monthly, $3,768 -$5,592 annually, plus copayments on visits, prescriptions and other expenses. All the plans under Enhanced 73 have an annual family deductible of $3,000, co-payments of $40-$50 and drug copayments of $20-$30.
- In Texas, a young Millennial couple in their early 30’s making $36,000 would have healthcare access anywhere from $87 to $318 monthly, $1,044 to $3,816 annually, and other costs including annual deductibles ranging from $4,500 to $12,700, doctors co-payments of $10-$60 and drug copayments.
- Another viable option for these families would clearly be not to enroll. If so, and they failed to obtain an exemption, they will have to pay a penalty or “shared responsibility fee”, which would only set them back minimally, $650 and $360 respectively, or 1% of their annual income. No exchange coverage is a prudent choice in many cases.
For Millennials and Hispanic exchange eligibles, it is clear that the exchange journey and plan options have not lived up to the reform hype. Exchange insurers and providers are in a shaky starting place from which to build trusting consumer relationships as they don’t easily forget their first interactions, particularly Hispanics. Repairing the initial experience damage and restoring consumer confidence are difficult to achieve. In our view, final resolutions will hinge on addressing the salient needs of the newly eligible.
The good news is that now insurers, physicians and hospitals begin handling the newly enrolled experiences. They can welcome the new ACA pioneers, turn around their belief in the system, and provide chummier, clearer engagement and on-going value. The following tips should be of help in moving organizations closer to a “best-in-class” service provider:
- Integrate targeting efforts to Millennial & Hispanics – In order to optimize Millennial acquisition & retention, insurers and health care providers must place emphasis on Hispanic strategies, addressing nuances and synergizing efforts.
- Minimize customer effort and channel switching – insuring consistency and increasing usefulness across consumer touch-points
- Deliver “Apple moments” and “wow” customer experiences – making emotional connections with consumers in their language of preference
- Accomplish your brand promises – providing transparency, and clear and concise information in every customer interaction. Consumers that trust a brand will meet their expectations are more likely to recommend. They become brand loyalists and vocal brand advocates.