Introduction
Economic, social and political trends are driving more and more consumers to purchase individual medical (IM) insurance. According to the consulting firm McKinsey & Co., the number of people buying their own coverage rose to an estimated 18.4 million last year from 17.9 million in 2007, and is expected to grow to 20 million in 2010.
Consumers today can choose from a growing array of plans with various types and levels of benefits, deductibles, premiums and co-pays. They can open Health Savings Accounts (HSAs) to manage their expenditures and gain tax advantages. And to learn about their options, they have virtually limitless resources that are available on the Internet.
But when it comes to deciding what’s best for them, where do they turn? More often than not, it’s to a local insurance agent. In addition, consumers who purchase their health insurance through an agent are significantly more satisfied with their experiences than those who buy online. These are two of the key findings of a recent independent study on consumers’ experiences in shopping for and purchasing IM insurance. Even with so much health insurance information available online, people prefer talking to an agent who can explain their options and recommend coverage based on their unique needs.
This paper will highlight the results of this online survey, which was sponsored by Assurant Health and included more than 1,000 respondents. It also features related information from other sources and provides tips to help consumers find and choose agents.
With health-care reform such a hot issue, Assurant Health believes it’s important for everyone involved in shaping policy to clearly understand what happens when real people buy their own health insurance. As the survey results indicate, consumers prefer having personal relationships with agents throughout this process to ensure that they receive the most value from their health plans.
Survey Note
The online survey referenced in this paper was conducted in May/June 2009 by the Chicago firm of Beall Research & Training, Inc. One thousand three (1,003) consumers who purchased IM insurance within the past two years were surveyed about their shopping and purchase experiences. The respondents were recruited from a representative online panel of Americans. All differences noted are statistically significant at the .05 level.
What Matters to Consumers?
Personal Advice, Attention and Peace of Mind
You probably have seen commercials for Web-based insurance brokerages that make buying health insurance online seem as simple as ordering a book from Amazon. However, the selection of the right plan to fit your budget, health status, coverage needs and financial goals is much more complicated - and consequential. Buy the wrong book, you just send it back. But if you have the wrong insurance, you might be wasting thousands of dollars a year, or, even worse, find you’re not covered for medical bills that could exceed your annual income.
Given what’s at stake, it’s not surprising that the majority of consumers seek advice from professionals before making a decision. The survey found that 62% of the more than 1,000 people who purchased individual medical insurance within the last two years did so through an agent. Other studies have had similar findings, including a 2007 report from the America’s Health Insurance Plans (AHIP), which showed that agents accounted for about two-thirds of total individual health insurance applications filed the previous year.
In addition, about 20% of respondents who eventually bought insurance online also took the time to consult with an agent. Of those who shopped online and talked to an agent, more than 50% did so to improve their decision-making by asking questions, getting explanations, seeking advice and confirming their choices. As one respondent commented, “Online shopping for medical insurance can be confusing. I wanted to be able to ask a real person questions about different policies and which would work the best for me while still being cost-effective.”
People also like working with agents when buying health insurance because they receive personalized attention, advice and service. About 39% of respondents cited this as a reason for consulting an agent; several noted the importance of having face-to-face encounters with someone they trust. According to one, “I trust the agent to provide good recommendations. He''s familiar with various carriers and their advantages and disadvantages.”
This comment highlights another key survey finding - consumers not only want their agents’ counsel but also follow their advice. In fact, more than 90% who purchased through an agent bought the plan their agent recommended. This result matches a 2009 McKinsey & Co. consumer health survey, which found that recommendations made by agents are accepted 88% of the time.
Consumers’ strong preference for personalized service and human interaction also was evident in a 2007 IBM survey of 1,000 Americans. Three-quarters of consumers were very satisfied with the service provided by their agents and remained committed to working with them in the future. More than half (53%) cited personalized service as what they liked best about agents’ services.
Other Agent Benefits: Speed, Efficiency
Of the consumers who shopped online, 36% did so to do basic research and compare plans, and about one-quarter felt it would be easier to shop online. But since the majority of all respondents evaluated three or more plans - which required in-depth analysis and interpretation - the entire decision-making process was typically much faster for those who consulted an agent rather than doing everything online. Consider:
- More than 75% of consumers who shopped through or purchased insurance through an agent talked to the agent for less than an hour before deciding what to buy
- In comparison, of those who shopped and purchased online, only 36% spent an hour or less online, while 28% spent more than four hours
- 31% of those shopping online described the experience as “time-consuming”
The time involved in trying to understand and compare plans was one of the reasons why 44 of the respondents who shopped online eventually purchased their insurance through an agent. As one of them remarked, “I went online to get an idea of pricing but wanted to talk to a real person to make sure I understood what I would be getting for my money.”
Agents Score Higher on Satisfaction in All Categories
Health coverage has been a top concern among consumers for years, but its importance has heightened considerably due to the economic downturn and uncertainties in the job market. According to the previously cited 2009 McKinsey & Co. report, 55% of consumers had health-related financial concerns, a 10% increase since 2007.
Unsure about their financial futures and anxious about their household budgets, consumers want to be certain they get the best coverage possible, customized to their specific needs. As we’ve seen, they want to be well-informed about their choices, but appreciate personalized assistance in making their decisions. In short, they want to be in control but also to be taken care of - both before and after they purchase insurance.
The survey indicates that agents are meeting their needs on all accounts. In fact, consumers who purchased their health insurance through an agent were significantly more satisfied with their shopping and purchase experiences and their outcomes than those who purchased online. They were more satisfied that they:
- Were educated throughout the entire shopping process
- Could easily understand the differences between health plan options
- Were presented with health plans tailored to their family situation, current health, financial situation, age and desire to use certain doctors and hospitals
- Chose plans that provided the best coverage possible given these factors
- Were able to get their questions answered and other help after the purchase
Consumer Tips
If you’re like most of the consumers in the survey, you’d prefer to work with a licensed professional when buying IM insurance. But how should you go about finding and selecting a qualified agent suitable for you? What kind of support and services should you expect to receive? What questions should you ask? These tips and suggestions provide some guidance.
When asked “which words best describe your experience shopping for individual medical insurance?,” 64% of those who bought through agents mentioned “helpful,” while only 36% of online purchasers used this term. Consumers clearly place high value on - and take comfort in - having an agent they know they can rely on for sound advice and personal service. As the following article excerpts (“The Role of Emotions in Buying Health Insurance,” McKinsey Quarterly Report, May 2009) indicate, this sense of reassurance that consumers attain by working with agents has palliative emotional benefits:
“Although the Web delivers immediate information, including quotes, it does not offer a purchase experience that meets the consumers’ emotional needs...As consumers face more choice, complexity and financial exposure for their health care in an increasingly uncertain world, what they are really seeking is peace of mind.”
Finding an Agent
- Ask friends or family members for their recommendations; you also can find agents who specialize in health insurance through the National Association of Health Underwriters, at www.nahu.org.
- Check with your state’s insurance regulatory agency to make sure the agent has a valid license and clean record.
- Consider talking to several independent agents before buying to compare their advice.
Understanding the Agent’s Role
- Agents wear many hats - educator, advisor, advocate, service representative
- An agent’s responsibilities include:
- Evaluating your coverage requirements and explaining the advantages and disadvantages of all available plans
- Providing you with well-researched, objective information on plan features, coverage, prices and network availability
- Helping you fill out application forms and assemble the necessary documentation for filing and following up on claims
- Reviewing on a regular basis the effectiveness of your health plan and helping you switch plans if appropriate
- Acting as a financial advisor with regard to health plans and HSAs
- Helping you to take action in a timely fashion to ensure you have the right coverage in place when needed
Asking Questions
- Agents should ask you questions to learn about your:
- Financial limits
- Health issues
- Eligibility for government programs or COBRA
- You should question agents about:
- Other fees besides premiums and deductibles, such as co-pays or the percentage of costs paid for doctor visits
- Benefit limits and exclusions (i.e., what your plan does not cover)
- Your policy’s annual out-of-pocket maximum
Conclusion
Americans are anxious about their finances, and several studies have shown that health coverage is their second-highest concern, after day-to-day living expenses. By 2010 it’s expected that some 20 million Americans will be responsible for buying their health insurance, and their decisions on which health plans and features to buy have weighty consequences. Unlike large companies, individuals and small employers do not have benefits departments to turn to for guidance. As Congress considers meaningful proposals for national health reform, it’s important to keep in mind the prominent role insurance agents play in informing and educating consumers and helping them choose plans to fit their needs.
Assurant Health hopes this survey brings attention to agents’ numerous contributions to consumers and our entire health-care system. While we strongly believe in consumer choice, we also greatly appreciate the 200,000 local agents who are empowering our customers to make informed choices for themselves, their small businesses and their families.
Economic, social and political trends are driving more and more consumers to purchase individual medical (IM) insurance. According to the consulting firm McKinsey & Co., the number of people buying their own coverage rose to an estimated 18.4 million last year from 17.9 million in 2007, and is expected to grow to 20 million in 2010.
Consumers today can choose from a growing array of plans with various types and levels of benefits, deductibles, premiums and co-pays. They can open Health Savings Accounts (HSAs) to manage their expenditures and gain tax advantages. And to learn about their options, they have virtually limitless resources that are available on the Internet.
But when it comes to deciding what’s best for them, where do they turn? More often than not, it’s to a local insurance agent. In addition, consumers who purchase their health insurance through an agent are significantly more satisfied with their experiences than those who buy online. These are two of the key findings of a recent independent study on consumers’ experiences in shopping for and purchasing IM insurance. Even with so much health insurance information available online, people prefer talking to an agent who can explain their options and recommend coverage based on their unique needs.
This paper will highlight the results of this online survey, which was sponsored by Assurant Health and included more than 1,000 respondents. It also features related information from other sources and provides tips to help consumers find and choose agents.
With health-care reform such a hot issue, Assurant Health believes it’s important for everyone involved in shaping policy to clearly understand what happens when real people buy their own health insurance. As the survey results indicate, consumers prefer having personal relationships with agents throughout this process to ensure that they receive the most value from their health plans.
Survey Note
The online survey referenced in this paper was conducted in May/June 2009 by the Chicago firm of Beall Research & Training, Inc. One thousand three (1,003) consumers who purchased IM insurance within the past two years were surveyed about their shopping and purchase experiences. The respondents were recruited from a representative online panel of Americans. All differences noted are statistically significant at the .05 level.
What Matters to Consumers?
Personal Advice, Attention and Peace of Mind
You probably have seen commercials for Web-based insurance brokerages that make buying health insurance online seem as simple as ordering a book from Amazon. However, the selection of the right plan to fit your budget, health status, coverage needs and financial goals is much more complicated - and consequential. Buy the wrong book, you just send it back. But if you have the wrong insurance, you might be wasting thousands of dollars a year, or, even worse, find you’re not covered for medical bills that could exceed your annual income.
Given what’s at stake, it’s not surprising that the majority of consumers seek advice from professionals before making a decision. The survey found that 62% of the more than 1,000 people who purchased individual medical insurance within the last two years did so through an agent. Other studies have had similar findings, including a 2007 report from the America’s Health Insurance Plans (AHIP), which showed that agents accounted for about two-thirds of total individual health insurance applications filed the previous year.
In addition, about 20% of respondents who eventually bought insurance online also took the time to consult with an agent. Of those who shopped online and talked to an agent, more than 50% did so to improve their decision-making by asking questions, getting explanations, seeking advice and confirming their choices. As one respondent commented, “Online shopping for medical insurance can be confusing. I wanted to be able to ask a real person questions about different policies and which would work the best for me while still being cost-effective.”
People also like working with agents when buying health insurance because they receive personalized attention, advice and service. About 39% of respondents cited this as a reason for consulting an agent; several noted the importance of having face-to-face encounters with someone they trust. According to one, “I trust the agent to provide good recommendations. He''s familiar with various carriers and their advantages and disadvantages.”
This comment highlights another key survey finding - consumers not only want their agents’ counsel but also follow their advice. In fact, more than 90% who purchased through an agent bought the plan their agent recommended. This result matches a 2009 McKinsey & Co. consumer health survey, which found that recommendations made by agents are accepted 88% of the time.
Consumers’ strong preference for personalized service and human interaction also was evident in a 2007 IBM survey of 1,000 Americans. Three-quarters of consumers were very satisfied with the service provided by their agents and remained committed to working with them in the future. More than half (53%) cited personalized service as what they liked best about agents’ services.
Other Agent Benefits: Speed, Efficiency
Of the consumers who shopped online, 36% did so to do basic research and compare plans, and about one-quarter felt it would be easier to shop online. But since the majority of all respondents evaluated three or more plans - which required in-depth analysis and interpretation - the entire decision-making process was typically much faster for those who consulted an agent rather than doing everything online. Consider:
- More than 75% of consumers who shopped through or purchased insurance through an agent talked to the agent for less than an hour before deciding what to buy
- In comparison, of those who shopped and purchased online, only 36% spent an hour or less online, while 28% spent more than four hours
- 31% of those shopping online described the experience as “time-consuming”
The time involved in trying to understand and compare plans was one of the reasons why 44 of the respondents who shopped online eventually purchased their insurance through an agent. As one of them remarked, “I went online to get an idea of pricing but wanted to talk to a real person to make sure I understood what I would be getting for my money.”
Agents Score Higher on Satisfaction in All Categories
Health coverage has been a top concern among consumers for years, but its importance has heightened considerably due to the economic downturn and uncertainties in the job market. According to the previously cited 2009 McKinsey & Co. report, 55% of consumers had health-related financial concerns, a 10% increase since 2007.
Unsure about their financial futures and anxious about their household budgets, consumers want to be certain they get the best coverage possible, customized to their specific needs. As we’ve seen, they want to be well-informed about their choices, but appreciate personalized assistance in making their decisions. In short, they want to be in control but also to be taken care of - both before and after they purchase insurance.
The survey indicates that agents are meeting their needs on all accounts. In fact, consumers who purchased their health insurance through an agent were significantly more satisfied with their shopping and purchase experiences and their outcomes than those who purchased online. They were more satisfied that they:
- Were educated throughout the entire shopping process
- Could easily understand the differences between health plan options
- Were presented with health plans tailored to their family situation, current health, financial situation, age and desire to use certain doctors and hospitals
- Chose plans that provided the best coverage possible given these factors
- Were able to get their questions answered and other help after the purchase
Consumer Tips
If you’re like most of the consumers in the survey, you’d prefer to work with a licensed professional when buying IM insurance. But how should you go about finding and selecting a qualified agent suitable for you? What kind of support and services should you expect to receive? What questions should you ask? These tips and suggestions provide some guidance.
When asked “which words best describe your experience shopping for individual medical insurance?,” 64% of those who bought through agents mentioned “helpful,” while only 36% of online purchasers used this term. Consumers clearly place high value on - and take comfort in - having an agent they know they can rely on for sound advice and personal service. As the following article excerpts (“The Role of Emotions in Buying Health Insurance,” McKinsey Quarterly Report, May 2009) indicate, this sense of reassurance that consumers attain by working with agents has palliative emotional benefits:
“Although the Web delivers immediate information, including quotes, it does not offer a purchase experience that meets the consumers’ emotional needs...As consumers face more choice, complexity and financial exposure for their health care in an increasingly uncertain world, what they are really seeking is peace of mind.”
Finding an Agent
- Ask friends or family members for their recommendations; you also can find agents who specialize in health insurance through the National Association of Health Underwriters, at www.nahu.org.
- Check with your state’s insurance regulatory agency to make sure the agent has a valid license and clean record.
- Consider talking to several independent agents before buying to compare their advice.
Understanding the Agent’s Role
- Agents wear many hats - educator, advisor, advocate, service representative
- An agent’s responsibilities include:
- Evaluating your coverage requirements and explaining the advantages and disadvantages of all available plans
- Providing you with well-researched, objective information on plan features, coverage, prices and network availability
- Helping you fill out application forms and assemble the necessary documentation for filing and following up on claims
- Reviewing on a regular basis the effectiveness of your health plan and helping you switch plans if appropriate
- Acting as a financial advisor with regard to health plans and HSAs
- Helping you to take action in a timely fashion to ensure you have the right coverage in place when needed
Asking Questions
- Agents should ask you questions to learn about your:
- Financial limits
- Health issues
- Eligibility for government programs or COBRA
- You should question agents about:
- Other fees besides premiums and deductibles, such as co-pays or the percentage of costs paid for doctor visits
- Benefit limits and exclusions (i.e., what your plan does not cover)
- Your policy’s annual out-of-pocket maximum
Conclusion
Americans are anxious about their finances, and several studies have shown that health coverage is their second-highest concern, after day-to-day living expenses. By 2010 it’s expected that some 20 million Americans will be responsible for buying their health insurance, and their decisions on which health plans and features to buy have weighty consequences. Unlike large companies, individuals and small employers do not have benefits departments to turn to for guidance. As Congress considers meaningful proposals for national health reform, it’s important to keep in mind the prominent role insurance agents play in informing and educating consumers and helping them choose plans to fit their needs.
Assurant Health hopes this survey brings attention to agents’ numerous contributions to consumers and our entire health-care system. While we strongly believe in consumer choice, we also greatly appreciate the 200,000 local agents who are empowering our customers to make informed choices for themselves, their small businesses and their families.