Health Plans Reach Out to Touch the Consumer

Some insurance companies are ratcheting their "consumerism" campaigns a notch higher by launching retail insurance stores. The latest to do so is Highmark, a Blues plan in western Pennsylvania, which plans to open two such stores under the Highmark Direct moniker in Mechanicsburg and Pittsburgh. Blue Cross and Blue Shield of Florida, Blue Cross and Blue Shield of Alabama, and Humana have also begun opening storefronts to cater to individuals and small businesses.

More than half of consumers who want to buy individual insurance don't know where to get it, according to Highmark research. Relatively few brokers sell to individuals, and most of those "sell on the Internet or by direct mail only, or through multi-level marketing programs," says Steven Nelson, vice president of consumerism and retail marketing at Highmark. "You would be hard pressed to find any producers that set up retail establishments or that put any marketing dollars into the individual consumer." They're not interested in selling to very small firms, either, he adds.

So to make its individual and small-business products more available, Highmark is experimenting with retail stores. But that's not the only reason. The company also wants to use these outlets to help educate Highmark members about the options available to them, including FSAs, HSAs, and HRAs, says Nelson. This is especially important, he notes, as consumers bear a higher share of the cost and as employers try to get them to become better healthcare shoppers. Highmark Direct will also hold meetings on the value-added benefits of Highmark members, such as smoking cessation programs, new-mother seminars, and nutritional consultations.

Of course, one reason why so many uninsured individuals and small companies can't obtain individual insurance is because of the cost. Apart from the fact that many plans will not take chronically ill people, the cost is very high even for the healthy, partly because of the commissions that insurance agents charge. But Highmark will not undercut its brokers by charging less than they do, emphasizes Nelson.

However, he adds, Highmark offers subsidized plans to low-income adults and to parents of children who are eligible for the State Children's Health Insurance Program. While the premiums are the same as those that would be charged to anyone else, he says, Highmark and/or the government subsidize the cost. Non-profit Highmark, he adds, is the insurer of last resort in its area of Pennsylvania.