Ancillary benefits as differentiators

In a controlled, regulated selling environment like state health insurance exchanges, it will be difficult for health plans to differentiate themselves.  Brand and price will be two of the most powerful differentiators.  Quality / satisfaction ratings are another way to separate yourself from the competition.  A fourth option is to add plan features that fall outside the essential state and federal benefits that everyone offers.

Ancillary benefits such as dental, vision, alternative medicine, disability, etc. can add significant value without greatly impacting the cost of a plan design.  Several ancillary benefits have a high perceived value, but cost very little to deliver, particularly if wholly owned by the carrier.  Even if they add a few dollars to monthly premium, they may be perceived as offering far more value to the right consumers.

Any added benefits must be carefully constructed to minimize incremental costs or unfavorable utilization.  Otherwise, the plan will not get past consumers initial price filters.  The goal is to make it to consumers’ final consideration set and then win them over with additional value that sets your plan apart.

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