I was able to interview three customers for healthcare
coverage. The customers all expressed that price was the most important factor
in determining which company they chose. After price, the reputation of the
company was important for two out of the three interviewees. For one person, the
company chosen was new to the local market and therefore had not established a
reputation, so price was very important along with the benefits of the plan selected
versus other options available.
In my market segment, price is the driving factor.
However, the benefits of the insurance plan are also important because a plan
that cost less may have a high utilization cost. So, a person can save money on
the monthly premium but end up paying more in the long run if services are used
frequently. Purchases are usually made
online, over the phone or in person with a licensed agent or other qualified
individual.
Since consumers are the main purchasers of the product,
these are B2C transactions and not B2B transactions.
Purchases made online are usually done through the setup
of automatic payments via personal account with the insurance company. Payments
can be completed with a credit card, ACH or payroll deduction. In some cases,
consumers mail a check or money order to remit payment. Financing in the
tradition sense is not needed, however subsides or contributions from employers
are common for at else partial payment of premiums.
Two out of the three interviewees felt that they had made
a very good purchase. They are very happy with the level of benefits and
service they receive from the company. In fact, one interviewee tried another
company and went back to her present company after having problems with the switch.
She noted that the level of service was inferior to the company she prefers
which is why she switched back. Another interviewee is in the process of
evaluating the purchase and has not determined the quality of the purchase.
In my observations, I have noted that in the healthcare
market consumers are more price sensitive when making a purchase than in other
circumstances. This is probably because insurance is a big-ticket item. A plan
for a couple in their mid-to-late fifties can easily cost $18,000/year. That is
a price tag higher than many new cars. When evaluating a plan, consumer care
focused primarily on the cost, but they also nearly equally concerned about making
sure the plan meets their needs. Most seem to like the choice they made.
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