Hidden Gems of Healthcare

Where there’s change, there’s opportunity, and for health insurers current economic conditions have expanded the growth potential of the individual insurance market (also known as nongroup or direct-purchase insurance). Aging is another change that offers new market possibilities. This white paper will address some of the challenges for healthcare marketers as they retool to reach promising segments in a changing marketplace — a task made easier using customized media.

Employer Cutbacks

When the U.S. economy first started sputtering, business pundits often described the healthcare industry as being recession-proof. That view changed when the economic engine ultimately seized up, resulting in massive layoffs throughout the nation’s workforce. Workers who lost their jobs also lost their employer-sponsored health benefits, and health insurers have watched their core business—group health insurance—decline sharply.

The individual insurance market can provide access to coverage for the growing number of uninsureds while helping health insurers boost their bottom line. The U.S. Census Bureau reports that of Americans with health insurance in 2007, about 9 percent, or nearly 27 million people, were covered by direct-purchase insurance.¹ Approximately 1.1 million people become uninsured for every 1 percent increase in the unemployment rate (in addition to the 1 million who become eligible for Medicaid and the State Children’s Health Insurance Program), according to the Kaiser Family Foundation.² Since the recession began in December 2007, the number of unemployed U.S. residents has increased by 3.6 million, as of February 2009.³

While it’s impossible to predict how many newly uninsured people might turn to the individual insurance market for coverage, health insurers recognize that even a sliver of this presently expanding pie is a market-share asset. Nearly half (48 percent) of the health plan executives surveyed by the consulting firm CSCsaid they anticipated an increase in the demand for their individual insurance products.⁴

Affordability is likely to be a determining factor among potential purchasers, and the cost of coverage is based in part on health status. Table 2, from the industry trade group America’s Health Insurance Plans, shows the breakout by age group for individual insurance for singles and families.