Minimizing delinquent payments in a health insurance exchange saves time and money. Delinquency communications not only cost staff time, but they also cost money to deliver to delinquent accounts. Depending on the scale of your exchange, just a 1% to 3% decrease in delinquent accounts can save a significant amount of money.
Here are five ways to minimize delinquent payments in your health insurance exchange:
5 Ways to Minimize Delinquent Payments in your Health Insurance Exchange
- Offer a Multitude of Payment Options
- Promote Auto-pay
- Gather Email Addresses
- Pay Attention to Delinquencies
- Ensure the Invoice is Clear
Offer a Multitude of Payment Options
1999 was the year of Napster. At its core, Napster was a peer-to-peer file sharing service that specialized in enabling you to share your MP3 music files with other Napster users in an easy to use interface. By contrast, buying MP3s at the time was difficult. There was no easily accessible store that Amazon, Google and Apple offer today to buy and listen to MP3s. Most music was still bought on CDs.
Napster made getting music easy. As a result, it was among the most popular applications from 1999 to 2001 when it ultimately was shut down.
The lesson: If you want people to pay for something, you need to make it easy for them to do it. For health exchanges that want to reduce delinquencies and improve cash flow, you need to make it easy for health exchange members to pay you. In addition to checks, you need to offer individuals the ability to pay by ACH, by credit card and even by cash. The easier you make it for someone to pay for something, the more likely they are to pay on time.
In addition to multiple payment types – like ACH, credit, debit, cash – also make sure there’s an easy-to-use payment portal that delivers account balances, past invoices and details like past payments and invoice and payment dates. Delivering more information online and streamlining the payment process can help decrease delinquent payment rates.
Consolidated billing can help. Many public exchanges, for example, have members pay insurers directly. If a member enrolls in multiple insurance types they likely are making payments to multiple insurers. The more billing complexity you add, the more likely it is that a member will miss a payment. Instead, work with a consolidated billing partner like Certifi. We can help manage billing and payments and simplify the member billing and payment experience.
A west coast utility was looking to improve adoption of their auto-pay feature. They created a multi-channel, incentive-based program to target their customers via bill inserts, inbound call promotions and posts to social media.
The four-month campaign led to a 21% increase in autopay enrollment.
The more people you can encourage to sign up for auto-pay using a credit card or ACH payment, the less likely they are to have a delinquent payment. If your exchange doesn’t offer auto-payment, that’s a good first step. Then, promote that method at every turn so that more members sign up. Include auto-pay promotions in your enrollment process, include a message on monthly invoices and create a promotional campaign to get members to use the auto-pay feature. It’s an easy way to ensure you’re minimizing your delinquency notifications.
Gather Email Addresses
Most health insurance exchanges send direct mail to communicate to delinquent accounts. Studies show direct mail is more likely to be read and individuals believe direct mail is more serious when compared to an email campaign.
Direct mail has its benefits when sending invoices and delinquent notifications, but don’t forget to leverage email too. Email costs less and delivers faster than direct mail, so delinquent accounts may send payment faster. Because your invoice and notification emails are transactional in nature, they’ll be opened and acted on at a higher rate than other emails. Email also gives you other opportunities to send payment reminders and payment confirmation emails. Those emails can limit delinquencies and improve the perception of your brand. At worst, email can complement your direct mail invoicing activity.
Pay Attention to Delinquencies
When Shaun Boughen, the President and Founder of Upper Canada Truck Sales, wanted to grow his business, he decided to start using dashboards to analyze data like his sales pipeline and truck inventory. Once setup, he found he was able to make better decisions and streamline processes based on that data.
There’s an old saying that you can’t improve what you don’t measure. Failing to monitor or measure delinquent accounts likely leads to no improvement in your delinquency rates. Be sure to run reports at least monthly to review your delinquencies. Or, create a dashboard that shows important delinquency data so you understood what your delinquencies look like. Then, ideate and implement strategies – like the aforementioned auto-pay campaign – to try to drive those delinquency numbers down.
Ensure the Invoice is Clear
In marketing circles, an entire industry exists built on landing page optimization. When people visit a web site, marketers want them to progress toward a sale or some other website goal. To do that, marketers typically want them to take some action on the page. That action, generally speaking, marketers call a conversion.
To achieve a conversion, marketers change little things throughout the page. They will modify the title, subheads, colors, and content word choice to determine what impact those changes have on the conversion rate. Poorly written content or confusing conversion paths can lead to fewer conversions.
Your invoices are similar. One reason people fail to pay invoices is because the invoice is confusing, it’s unclear what is owed, or the individual doesn’t understand how to pay. Ensure your invoices are clear by showing previous balances, any payments, new charges, adjustments, due dates and make sure the total amount due is highlighted.
Detachable invoices with account information, invoice numbers and clear instructions relating how to pay work great, too. Don’t forget to include a link to your payment portal on your invoice, either. Delivering clear information and making the invoice easy to return will improve on-time payment rates.
By using these five tips, you’ll be able to minimize delinquent payments in your health insurance exchange. Good luck!
Certifi helps private and public health insurance exchanges improve enrollment and build a better member experience with health insurance exchange premium billing and payment solutions.