Cut the churn: Lessons in member loyalty from Southwest Airlines

Given the challenges health insurers have encountered on the individual exchanges, perhaps the best business model for them would be to emulate a popular airline company, according to Vox.

The Affordable Care Act marketplaces are designed to increase competition and help consumers find the health plans that are best for them, which could change from year to year. Indeed, the Obama administration took pains to encourage consumers to shop around during this past open enrollment period.

But the problem, the article argues, is that degree of plan switching--as well as the many customers who drop and reenroll in coverage overall--make it more difficult and less advantageous for health insurers to help their members get and stay healthy.  

eBook

9 Tips for Implementing the Best Mobile App Strategy

The member mobile app is a powerful tool for payers and members. It can help improve health outcomes, reduce operational costs, and drive self-service — anytime, anywhere. In this new eBook, learn tips and tricks to implementing the best mobile app strategy now.

"The fact that people are actually switching seems like a sign that this market is functioning as it was designed. But … all that churn sure makes it hard for an insurer to make money by investing in its customers' long-term health," adds New York Times reporter Margot Sanger-Katz in a discussion posted on the blog The Upshot.

Therefore, a better approach may be for insurers to act like Southwest Airlines--focusing solely on offering low prices, narrow networks and exceptional customer service, according to Vox. At this point, insurers simply may lack the tools and trust necessary to work with members to change behaviors, the article adds.

Even so, payers are increasingly trying to engage members through health improvement initiatives. Some major insurers have partnered with grocery stores to help encourage healthy eating, and UnitedHealth recently debuted a wellness program for employer-based plan enrollees that makes use of a specialized fitness tracker.

To learn more:
- read the Vox article
- here's The Upshot post

Related Articles:
The challenge of keeping exchange members enrolled
Amid enrollment push, ACA marketplaces struggle to keep customers
HHS: Consumers who shop around save money
Disruptive innovation threatens insurance industry
Anthem, Humana, UnitedHealth partner with grocery stores to keep members healthy

Suggested Articles

A new CMS report estimates that premiums for the second-cheapest silver tier plan will decline by 2% on HealthCare.gov next year.

Premiums on the ACA's exchanges for 2021 are expected to rise by about 1% as insurers struggle to figure out the impact of COVID-19, KFF report finds.

​​​​​​Global healthcare funding soared in the third quarter, hitting a new record of $22 billion. Digital health investments also reached new heights.