April 15, 2015 | Rosemarie Day

Consumer Behavior During Open Enrollment

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Some of the most interesting findings to come out of the Affordable Care Act’s (ACA’s) second open enrollment period are the detail around consumer behavior.  With the help of some great survey data, we’re now able to look at the purchasing behavior of returning shoppers as well as new ones.   This information will be extremely helpful to exchanges and insurers as they think about their outreach and retention strategies for this fall’s open enrollment, which starts in a little over 6 months.

This survey identified six consumer profiles for the ACA marketplace, both on and off exchange:  Dropouts, Persistently Uninsured, Newly Insured, Renewers, Switchers, and Non-ACA Insured.1 Here are some highlights of what they found:

WHO BOUGHT?

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  • The largest share of those who purchased coverage in the 2015 ACA market were “Switchers” (those who renewed but changed plans = 47%).  The rest were Renewers (those who bought the same plan = 41%) and the Newly Insured (12%).   This makes sense, because most shoppers who wanted to renew coverage faced higher premiums, but they had lower cost options if they were willing to switch coverage.
  • While this survey suggests there wasn’t a high percentage of Newly Insured people in 2015 (only 12%), if you take a two-year view of the survey results the number is much higher:  36% of those who moved into the 2015 ACA market (on or off exchange) report that they were previously uninsured (in 2013 or 2014).

WHY DID THEY BUY?

Bringing more uninsured people into the ACA marketplace will become increasingly difficult, as outreach dollars begin to dry up.  It’s important to understand how to reach this segment in a targeted way – what messages worked for the Newly Insured, and who should be the messenger?

  • Penalty matters – The survey shows that the biggest reason for the Newly Insured purchasing coverage (when asked for their top 3 reasons) is that 62% said they were told they’d have to pay a penalty if they didn’t get coverage.  The second biggest reason (51%) is that folks said they could now afford it.
  • Awareness made a difference – The Newly Insured were more aware of the carrots and sticks (subsidies and penalties) than the Persistently Uninsured.
  • Friends and family are key – The Newly Insured reported that friends and family were their biggest influencers to buy coverage (61%).  This was twice as high as their next highest categories of influencers (health care providers, 28%, and insurance company reps, 30%)!

HOW DID PURCHASERS BEHAVE?

  • Switchers:  As noted above, the survey shows that the largest share of people (47%) who purchased in the 2015 ACA marketplace switched coverage.   When asked why they switched, the biggest reason (55%) was that their premium increase was too high.  That was followed by those who reported that their out-of-pocket costs were too high (41%).
  • Renewers:  Interestingly, of the 41% who renewed into their same plan, two-thirds of them did not shop at all!  They made comments like:  “As long as I can still afford my plan, it’s easier to not go looking for a change.”    Also, the majority of Renewers (64%) were satisfied with their carrier, whereas only 47% of Switchers were satisfied with their carrier.

WHO DIDN’T BUY?

  • Demographics – The Persistently Uninsured were mostly male (61%) and had lower income levels than those with insurance.  They also reported lower health risks than the insured (particularly the Renewers).
  • Awareness – A relatively high share (41%) of the Persistently Uninsured were unaware of the penalty (as contrasted with only 20% of the Newly Insured).  Raising this awareness could help with enrollment – when told about the penalty, 30% of the Persistently Uninsured who were unaware of the penalty said they’d enroll in coverage (which would give a small bump in enrollment – it’s 12% of the uninsured).

1. McKinsey Reform Center_2015 OEP Consumer Survey Insights