Originally Published Sept  2007

 

GEORGE FOYO THINKS individuals are ready to purchase health insurance plans at retail stores--the way they purchase cell phones or clothing. The Blue Cross & Blue Shield of Florida Inc. South Florida market president says that companies which provide insurance for all employees are dwindling, leaving more individuals responsible for buying their own coverage.

To capture those individuals, Blue Cross Blue Shield of Florida has introduced 40 new low-cost plans, with more on the way. A "Blue Tours" bus travels to sporting events and concerts to increase visibility. And, after the success of a test retail store in Jacksonville, the company plans two for South Florida: Foyo hopes to have storefront locations in Broward and Miami-Dade selected by the end of the year.

"We are bringing it to the community," Foyo says. "It's a whole new way of thinking for Blue Cross Blue Shield of Florida."

Foyo says the stores will look like a cross between a bookstore and a computer or cell phone store, with private rooms where customers can meet with insurance agents, and classroom space for health care seminars. Alongside the agents will be Blue Cross Blue Shield employees trained specifically to work in the stores selling health insurance plans, as well as add-ons such as dental and life insurance.

 

Reaching out with retail stores could help those interested in insurance get answers quickly, from real people, says Alwyn Cassil, director of public affairs for the Center for Studying Health System Change, a nonpartisan research center based in Washington. That helps get more people over a major hurdle of buying individual insurance: "Because of the complexity of all the different plans out there, it can be fairly difficult for an individual to know what they are purchasing," she explains. "But it strikes me as cost-intensive from the insurer's side."

Vince Castro, the chief marketing officer of Miami-based BenTrust Financial, a firm that handles insurance and financial services for South Florida clients, agrees. "Blue Cross is not in the retail business," he says. "They are going into territories that they are not familiar with."

The company's retail efforts are part of a marketing push that includes the "Blue Tours" bus. Besides hitting high-visibility events, the 2,300-square-foot vehicle has been touring the state, offering health screenings and nutrition information in areas with large uninsured populations. While BCBS promotes good health, it also offers information about its insurance plan options.

"Blue Cross is being clever trying to find what customers want and need by being there," says Linda Quick, president of the South Florida Hospital & Health Care Association. "You don't see that with insurers very much."

Foyo says the industry must change. "We are evolving to the needs of the market," he says. "I don't think we can remain static."

Driving that need are statistics showing that as health insurance costs rise 2 percent to 3 percent faster than general inflation, many businesses have decided that they just cannot pay for it anymore. Individuals think they cannot afford to buy their own plans. And Floridians are increasingly uninsured--nearly 27 percent of those under 65 lack health insurance, according to a June study by the Washington-based Commonwealth Fund.

BCBS Florida's low-cost plans have been popular, Foyo says. By the end of 2006, they covered 80,000 Floridians. Since BCBS introduced the plans in May 2006 in South Florida, which BCBS considers the southernmost eight counties in the state, 30 percent of total sales in the large region were low-cost plans; one third of those customers were uninsured before buying the plan. The company's net growth for the year was about 10 percent--and Foyo says a third of that growth was in South Florida.

The company's new plans are designed to offer customers a variety of choices depending on what stage of life they are in, Foyo says. For instance, a healthy 22-year-old male might only insure against catastrophic events, whereas a woman in her early 30s considering having children might want maternity visits included.

"In the past, one size had to fit all," he says. "Through us there are a lot more choices."

Foyo estimates that about 20 percent of Florida's uninsured qualify for Medicaid benefits (they are 250 percent above the poverty line). The other 80 percent, he says, are working poor, and could afford some sort of plan from BCBS. "There will always be some people who don't want to spend the money and feel like they don't need it," he says. "But they will have the choice."

The low-cost plans are a good option for young people and could lower prices for all subscribers as well, says Ralph Glatfelter, senior vice president with the Florida Hospital Association. "We believe it's important to add as many young healthy people to the rolls of the insured as possible," he says. "It expands the overall risk pool without substantially increasing the risk. In the long term, it will result in more stable pricing."