Health Insurance: Now Sold in Stores
The next big thing in health insurance may be on busy Roosevelt Avenue in the Flushing section of Queens, N.Y. There, in a shop tucked between a drugstore and a mobile phone center, UnitedHealth Group is learning to sell health insurance to the masses the way other companies sell shoes or office supplies. The staff offers help in the eight languages and Chinese dialects spoken in the neighborhood. Customers can buy a medical plan, check their blood pressure, and plop the kids in front of the office’s Xbox game console while getting advice on doctors, healthy cooking, or drug interactions. IPad stations offer self-guided tours of benefit plans, and there’s even a wellness room where an audiologist fits hearing aids.
The experiment by UnitedHealth—the biggest U.S. medical insurer, with estimated 2012 sales of $110 billion—is designed to help it compete under the new Affordable Care Act. By 2014 as many as 85 million consumers, representing $600 billion in purchasing power, may be shopping for their own health care on government and private exchanges, according to consulting firm Oliver Wyman. To get ready, insurers are trying to bolster their brands and reputations for customer service. WellPoint last year announced a $50 million branding campaign; others have boosted advertising as well. “Customers want to bring the conversation to where they are,” says Christopher Law, a UnitedHealth vice president who oversees the insurer’s retail site. “Why can’t it be more like a bank, where you can go in and have tellers helping you out?”
The year-old Queens storefront, one of eight UnitedHealth has recently opened in the U.S., joins outlets in Manhattan, Philadelphia, and greater Los Angeles. Last year the company also decided to make permanent 16 temporary centers it had opened in malls from Las Vegas to Palm Beach, Fla. In Pennsylvania, insurer Highmark has opened nine outlets; Blue Cross and Blue Shield of Florida has 11 in the Sunshine State, including some paired with clinics where members can also get medical care.
Whether the stores succeed in luring new business depends on their ability to provide useful services, rather than play a purely promotional role, says Marc Pierce, founder of Stonegate Advisors, which consults for health plans on retail strategy. “If you can truly demonstrate you’ve got a Genius Bar of health care, where people can get answers to questions they couldn’t get anywhere else,” he says, “then you can see it taking off.”
Matt Fidler, vice president of consumerism and retail marketing at Highmark, says Obamacare is fueling interest in retail health insurance sales. The act may expand coverage to more than 30 million Americans, many buying it for themselves at online marketplaces set for a 2014 debut. Employers such as Sears Holdings are feeding interest in individual plans by announcing that they’ll shift workers to private exchanges, where they can select their own insurance—and that Sears will help pay for it. The aging population also means more Americans will join Medicare, the federal program that gives seniors the option of choosing private plans run by insurers such as UnitedHealth or Humana. “When you see a massive category shift like we’re going to see with reform, the first movers, the first ones out of the gate, they are the ones deemed the most knowledgeable and credible,” Fidler says. “We want to be the one people recommend to their friends and family.”
It’s a big shift for insurers that have traditionally won by focusing on an audience as small as one: the business owner or human resource chief who may choose coverage for an entire workforce. “You’re going to have to market in a more retail environment, something that this industry hasn’t had to do historically,” WellPoint Chief Financial Officer Wayne DeVeydt told investors at a Sept. 10 conference. “Branding is going to become even more relevant.”
Through October, UnitedHealth’s Queens store had enrolled about 4,200 people, a sliver of the insurer’s 36.5 million medical plan customers. Still, the storefronts are popular with groups that prefer face-to-face attention, such as Medicare members, he says. “We understand that each individual customer has an individual set of needs,” he says, “and we need to simplify and personalize the system.”