In recent years, the Industry as a whole has been asked to make considerations in terms of how certain options, familiarity, and certain identifiers affect rates and the customer experience. There are many more factors involved in building a health insurance product, decisions on how and where to market, and what the expectation is for providing benefits. Some of these factors are driven by regulatory requirement; some are driven by consumer advocacy; and most are driven by the carrier’s desire to do be compliant and “to do the right thing.” This statement is true regardless of whether you practice in the Life &Health or Property & Casualty arena.
Health Insurance has certainly evolved from providing simple benefits to a consumer for seeing a doctor for exams used in routine preventative services to providing emergency care and disease control. A carrier must consider what options are not only desired by the public, but what benefits in a plan qualify under regulatory requirements. Compliance Departments are working more closely in the with product development teams as allies on the creation and compliant marketing of these products. Many readers may remember when a new product was presented to your Compliance Department, and it wasn’t always met with the most exciting positive tone because the Compliance unit was rather known as the “Nope” department – particularly in the Health arena. More recently, you may have experienced new production as opportunities for collaboration on “how” to build a product so that it “fits”. Compliance teams are finally starting to lose the negative stigma regarding what we do and how they do it. Yet, we have so much more to consider and a lot more work to do.
Is your carrier building plans familiar to what’s currently in the market for the sake of competing with another? Is your carrier creating new options through a desire to meet a need presented by the healthcare consumer? Possibly, your carrier is using these innovative opportunities to create a product that does both. In a perfect world, that would be very opportunistic. In reality, the Compliance unit must consider every regulatory requirement, and they are not uniform by state. they also must consider rating factors. What experience modules does your actuarial team use to consider rating a new product when there’s not much data for certain new factors of consideration? Admittedly, some of this is a “best guess” scenario.
In regards to rate, the industry has been asked to consider numerous not so familiar factors when justifying a rating plan for health insurance products. In an effort to ensure that consumers know they are being heard, regulators have asked health insurers to find alternatives to traditional rating factors. How is your carrier doing this? Do your products and rates consider gender, geography, race, economic stature, or possibly the number of providers offering such services? We are certainly having to take a second look in what data is available for these types of factors and it’s not so cut and dry and outlined as clearly as it was twenty years ago.
These are just a few of the myriad of new nuances facing the health insurance industry today, but, virtually every line of insurance, as well as businesses in general are struggling with changing environmental, economic and demographics as well. While Industry is requested to develop more useful and equitable products, keep in mind that our regulators are also tasked with responsibility of determining how such products conform with regulation in the same changing world. You probably have witnessed the temperature change among society, the industry and regulator, while navigating these relationships. The industry and regulators both have to satisfy and provide for the consumer. That’s not an easy task for either of us, while still looking for ways to remain relevant and profitable in business. As we navigate through these new exciting times, remember to continue to remain partners in providing health insurance products. It’s not what it once was, but we have the ability to make it the best it can be.