Can We Help Millennials Choose the Right Health Coverage?
What are Millennials' healthcare insurance preferences? The answers might surprise you.
According to the 2015 c2b Consumer Diagnostic, a national study of healthcare consumer attitudes and behaviors, the most important attribute to Millennials for a health insurance company is that it is an institution “they can trust.” This actually rated slightly higher than cost (e.g., premium, copays, etc.), and while other generations rated “trust” highly, other attributes were more important.
According to a February, 2014 tracking poll conducted by the Henry J. Kaiser Family Foundation, young American adults between the ages of 18 and 29 are evenly split in their coverage preference between low-cost, narrow networks and broader, more expensive alternatives.
It all depends on price tolerance.
Kaiser found that 47% of younger Millennials would rather have a low-cost, narrow-network plan (akin to a Bronze-level plan on the Obamacare Marketplace exchanges). An equivalent 47% prefer plans that cost more, but provide a broader choice of doctors and facilities. Among the oldest members of the Millennial generation — those over 30 years old — reported preferences exhibit a shift: 50% prefer broad coverage, higher premium plans, while 41% still prefer low-cost, narrow-band plans.
What is the implication there? Most likely, younger Millennials (who are just beginning their careers) have lower average wages than older members of their generation who are now approaching the beginning of their peak earning years. As purchasing power goes up, the value of a broad network plan is more apparent and thus becomes a stronger selling point.
That doesn't mean that low-cost, narrow-band plans are less desirable: for many low-income young adults, they're providing access to critical healthcare coverage (note, access to coverage is not the same as access to healthcare… a shortage of primary care physicians is accentuated by an increase in covered lives). This isn't just true of Millennials who grew up in low-income circumstances — it's true for middle-class and higher-strata Millennials who have assumed large student loan debts, who are renting or purchasing their first homes and who have yet to "pay their dues" in a job market still dominated by non-retiring Boomers.
How, then, can you figure out how to market your plan?
If your business is marketing health insurance to Millennials, you need more than just demographic information to craft your messaging — you need insights provided by psychographic segmentation. You need to know who your Millennial consumers are.
It's not enough to assume that all Millennials are struggling in the job market and want a low-cost plan. Kaiser's results directly contradict that assumption.
So what motivates your individual Millennial consumers to buy? Are they quality shoppers or price shoppers? Do they have specific chronic illnesses (i.e., childhood cancer, neurological disorders, obesity, Type I diabetes) that require follow-up continuing into adulthood? Do they feel loyalty toward a particular hospital or doctor and want to stay with that provider?
Beyond that, what communication channels do your individual Millennial consumers prefer? Your tactical marketing plan should not be based on simplistic age vs. preference assumptions. Smartphone apps and eHealth are buzz development topics among healthcare IT and healthcare marketing professionals, but some studies are beginning to show that digital technology is not going to be the great wellness savior that many of us have been led to believe it should be. Some Millennials will engage digitally, sure. But others need person-to-person coaching. Some are most influenced by word-of-mouth information from friends. Some do what their families have always done.
Psychographic segmentation allows you to approach different sets of healthcare consumers based on their motivations, priorities, attitudes, values and preferences. Another fallacy is that all Millennials think of themselves as “Young Immortals,” without a need to focus on health today. This may be true for a portion of the Millennials, but a high percentage of this generation actually prioritizes health & wellness and are willing to invest in it. These Millennials belong to the Balance Seeker and Self Achiever psychographic segments, and while they are both health-proactive, they respond to different messaging and communication channels.
Should health insurers tap into healthcare providers' influence as a marketing tool?
According to some industry experts, yes. It is becoming clear to many healthcare provider organizations that they have a role to play in helping their patients to purchase the right coverage. That view is supported by calls from within the industry for greater investment in patient analytics.
Psychographic segmentation is the key to impactful analytics. It's one thing to broadly understand who your healthcare consumers are and to tabulate what they do. It's another thing entirely to develop deep insight into why individual healthcare consumers do what they individually do.
For health insurers — on or off-exchange — there would seem to be a natural partnership with providers, who (ideally) have the most boots-on-the-ground intelligence about their patient cohorts and, simultaneously, wield the most power to engage and directly influence their consumers' decisions. Such strategic partnerships would allow the sharing of psychographic information about localized patient populations, co-development of service lines and collaborative customization of the coverage products Millennial patients would need to choose those services.