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A How-to Guide: Compare Individual and Small Group Health Plans

Posted by Eric Grace on Thu, Mar 01, 2012 @ 10:53 AM

Do you find it difficult to compare health insurance plans like members compare them when making buying decisions?

individual and small grpup health insurance comprison time and money 

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Here's a simple example of why knowing how to compare health insurance plans like members could save health plans a LOT of time and money.

The deductible on Plan A is not included in the Out of Pocket (OOP) Max. Plan B includes the deductible.

Plan Name

Deductible

Stated OOP Max

Real OOP Max

Plan A

$5,000

$50,000

$55,000

Plan B

$6,000

$50,000

$50,000

A $5000 difference could be a make or break determining factor in consumer health insurance plan selection. This decision could cost you a new valued member.

This simple example is only one of many scenarios that need to be considered when comparing individual and small group health insurance plans offered by competing Health Plans.

Conducting a Health Insurance Plan Comparison

Understand Your Target Markets

Determine your target market sweet spot. It's not all about member acquisition. Don't forget to consider your existing member census for purposes of member retention. Define personas for those census variants that provide your Health Plan with the best margins. Include the following in your considerations.

  • Census Type (individual, couple, family, small group)
  • Age for each individual in the census
  • Gender for each individual in the census
  • Geographic location (zip code)

Know Who Is Competing For Your Individual and Small Group Members

Knowing which competing Health Plans are already in your target geographic market and knowing what individual and small group plans they are offering is critical to the success of the Health Plan. Unfortunately, the effort can be frustrating for professionals. Information about many variants of a particular health insurance plan are buried on proprietary insurer websites that are difficult to navigate and time consuming to obtain.

Many Health Plans claim "we only need to analyze the market once a quarter, or semi-annually". Not anymore!

20% of the competing products on the market are nimble and create market change every month. Understanding the competition once a quarter or semi-annually puts your Health Plan behind market movements, not 'in front of market movements', and not at a bare minimum 'on top of market movements'.

Track Changes In Your Individual and Small Group Markets

Tracking monthly changes in your individual and small group target markets is actually quite simple – caveat: 'if you have the right tools, infrastructure, information technology skills, subject matter expertise and the big whopper  budget!'.

Some Health Plans talk themselves into going down the expensive path of building internal IT empires that code scripts and manage and monitor data collections and build historical trends. Unfortunately, they spend way more time and money than necessary and they wind up defocusing from their core competency of providing insurance to members.

All of the following need to be considered.

  • Rate and benefit aggregation for each census.
  • Data normalization to eliminate differences and provide an 'apples to apples' comparisons.
  • De-duplication and cleansing
  • Data publishing
  • Business Rules
  • Self Service reporting

Why did I say all this was simple? Because it can all be handed to a service that does all of this work, specifically for Health Plans. Oxlo Health Insurance Insight™ is the best example. Subscribing to a service like Oxlo Health Insurance Insight™ drops the level of effort required by the Health plan to the following 2 tasks

  • Census Definition - Define Your Target Markets
  • Login and run reports or pick up your data.

Tags: Software for Insurance Companies, Individual Health Insurance, Small Group Health Insurance, Insurance Solutions