Health care insurers turn to brick-and-mortar option to lure customers

(CBS News) America's health care system is in the middle of a major transformation. One of the biggest parts of President Barack Obama's health care law is set to roll out in just weeks. And that is leading insurance companies to re-think how they do business with millions of Americans.

Soon everybody will be required to have health insurance, and many Americans will have to buy it for themselves. That's why insurance providers are rolling out retail stores to sell their product, allowing people to comparison-shop the same way they do for things like cars and appliances.

Recently, Phyllis Simon was out shopping for health insurance, looking for better coverage for less money. She visited the Blue Cross Blue Shield Horizon Connect store in southern New Jersey, which opened last year.

Tom Vincz, an employee at the store, said, "Having a health insurance retail center where you can come in and have questions answered about purchasing a policy and understanding the benefits will be a good thing."

It's a brick-and-mortar strategy that major insurers are turning to, as millions of Americans get set to add health insurance to their shopping lists. President Obama's health care overhaul requires people sign up by the end of March, or face a penalty.

Jayne O'Donnell has been covering the Affordable Care Act for USA Today. She calls this the "retailization of health insurance." O'Donnell told CBS News, "It's up to the insurers to really compete and increase their marketing and lure as many of them as they can."

In the past, the industry's main customers have been employers. Now insurers have to sell to individuals as well.

On July 18, President Obama said, "New online marketplaces will allow consumers to go online and compare private health care insurance plans just like you'd compare over the Internet the best deal on flat-screen TVs."

But some consumer advocates say the retail stores could keep customers from getting their best deal. O'Donnell said, "These insurance companies like having their own stores so they can be in control of the customer, who, once they get them in the door, are theirs."

O'Donnell argues the best deal could be found online. She said, "You can really compare and contrast them on the state exchanges and you're not going to be able to do that at a retail store."

Either way, CBS News' Jan Crawford added on "CBS This Morning," insurers will be competing to add young, healthy people to their plans to help cover the older people or sick people, whom they can no longer deny coverage to, under the law.

Watch Crawford's full interview above.

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