Individual Health Insurance Markets That Work, Part One
You walk down the street and you see retail locations to transact with your health insurance company. They're promotional in nature, so the signs are for mature consumer marketers. It's something the health insurance industry in the U.S. is on the cusp of, and in Australia is a working example.
HLM: For Network Health, how realistic is a retail model?
Gordon: We are actually setting up a retail presence in Worcester, Mass. We are partnering with our parent company, Tufts Health Plan, which is a large commercial and Medicare Advantage insurer.
We do believe collectively people will want to see us face-to-face, and that we can add a level of service by being on the ground in a retail presence. Will we have a storefront every few blocks in the city of Boston? No, but we are trying to be creative and resourceful. I think the point Australia makes, and shows, is that it is a complex purchase and people do want some human contact.
HLM: A key part of making the insurance exchanges affordable in the U.S. is having a large number of young people enroll to spread the risk, has Australia also figured that part out as well?
Gordon: Yes. They use a mix of carrots and sticks to encourage people over a certain income [level] to buy health insurance. It's completely optional; there's no mandate. If you do not buy in, you pay more in taxes, and if you buy in before age 31, you pay a lower premium for the rest of your life. They call it a premium load factor, and they've created a dramatic incentive.
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