As advisors, our job is to evaluate our client’s situation and make customized recommendations about health insurance and other types of coverage. Unfortunately, some agents are guilty of telling clients what they want to hear rather than what they need to hear; instead of recommending cost-saving solutions that are outside the client’s comfort zone, some advisors adopt a “don’t rock the boat” strategy, narrowing their plan recommendations to those that satisfy their client’s wants but not necessarily their needs.
Health Maintenance Organizations, or HMOs, are a good example of a solution that doesn’t necessarily check all of the boxes on our client’s wish list but nonetheless could save them a lot of money. But rather than taking a glass-half-full approach and pointing out the positives of HMOs – that they are significantly less expensive than their PPO counterparts – brokers instead focus on the negatives: a smaller provider network, no out-of-network benefits, and a referral requirement when the patient needs to see a specialist.
This could be doing our clients more harm than good, though, by discouraging them from considering a solution that could help them get better overall coverage at a much lower price. To help break brokers of the habit of disparaging the HMO solutions in the market, we thought we’d provide a few talking points about why HMOs may not be a bad idea. Here are five good reasons to sell HMOs:
#1 – Not everyone has a primary care physician
It might be hard to wrap our heads around, but there are a lot of people out there who do not have a family physician. They might be fairly healthy and just go to the doctor once or twice a year, or maybe they’re too busy to schedule “normal” doctor appointments. When they do need medical care, they tend to use telehealth, a retail clinic, or an urgent care center. As we explain in a recent blog post, these sorts of “convenience care” solutions are growing exponentially, and that indicates a shift in the way people interact with health care providers.
#2 – Some people are willing to change providers
Even people who already have a primary care physician might be willing to see a different doctor if it helps them save money. Not everyone is attached to their physician, and some don’t even get to see their physician when they schedule an appointment; instead, most of their office visits are with a physician’s assistant or a nurse practitioner. When we assume our clients won’t be willing to change doctors, perhaps we’re just projecting because we ourselves would not want to change doctors. It never hurts to ask our clients if they have a doctor they’re attached to or if they’d be willing to try a different provider if it could save them some money.
#3 – HMOs can be less expensive
For those who would like to lower their insurance premium, HMOs can be a much more affordable option than PPO plans. The exact percentage difference will vary depending on the carrier, location, and plan design, but it’s not uncommon to see a monthly premium savings of 20 to 30 percent or even more for the same in-network benefits. That sort of savings cannot be ignored. To put it in perspective, a 20 percent savings on a $600 individual rate is $120 per month. A 30 percent savings would be $180, which may be just enough to help your client avoid lapsing on their premium payments mid-year, or could be spent in better ways.
#4 – HMOs might be the only game in town
In some parts of the country, switching to an HMO might not even be a choice; HMOs might be the only option in the individual market. If that’s the case, your job is a little different. Instead of comparing an HMO to a PPO, which isn’t an option for your client, you should spend time explaining some of the common misperceptions about HMOs, why the carriers only offer HMO options (price is a big reason), and why the client may actually benefit from an HMO. In other words, focus on the good rather than the bad so the client will be excited about what he or she is buying instead of being disappointed in the limited options.
#5 – For some people, their doctors are participating providers
Finally, it’s worth noting that HMOs, while smaller in size than PPOs, still contract with hundreds if not thousands of health care providers. For a lot of your clients, there’s a good chance that their doctors and preferred hospitals actually participate in the HMO network. If that’s the case, then the decision is much easier, especially if it means saving hundreds of dollars per month.
The Client Conversation
When we consider all of the reasons a client might choose an HMO option, it does seem a bit foolish not to at least discuss this solution with our clients. What could it hurt? If you’re worried that your client might not be receptive to the idea, maybe say something like this: “I know you prefer PPO plans, but humor me for a minute. I wouldn’t be doing my job as an agent if I didn’t at least mention all of the options available to you.” That way, the client is doing you the favor of listening to your elevator pitch about HMOs.
And, when you’re giving that pitch, you can incorporate some of the talking points above. Perhaps you could say, “A lot of our clients are initially reluctant to try an HMO plan for the same reasons you are: the network is a little smaller than with a PPO, and you do have to choose a primary care physician and get a referral to see a specialist. But, for those who are healthy and only see a doctor a couple times a year, this may not be that big of deal. In fact, some of our clients don’t even have a primary doctor, and those that do often end up seeing a nurse practitioner when they schedule a visit. Others tend to use the telehealth service when they have an acute condition like a sinus infection, so for them they’d be overpaying for a PPO, especially when you consider that the HMO might be 25 or 30% less for the same in-network benefits. It definitely makes sense for people if most of their providers are already in the network. Would you like me to check to see if yours are?”
This sort of short sales pitch is simple and non-threatening, so why not give it a try and see how your clients react? Let us know how it works.