By Janet Wagner
Selling high-deductible health plans (HDHPs) with their attendant health savings accounts (HSAs) can be difficult if you’re not prepared to counter common misconceptions and objections. Deon Dorsey, district sales manager for Assurant Health in Illinois, advises that to increase your chances for sale, you should “make your clients smart consumers” and fully explain the advantages of the plans. “If a client doesn’t understand why he should do it, he won’t,” says Dorsey, who recently relocated to Chicago from Las Vegas, where he successfully guided 97 percent of his clients toward HDHPs.
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If a client doesnít understand why he should do it, he wonít. |
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Simultaneously giving a client heaps of information on HDHPs and HSAs can be overwhelming, Dorsey cautions. Instead, address the two components individually. Start with the health-care plan; show your client a side-by-side comparison of the costs associated with his current plan and those associated with an HDHP. Dazed by the difference in deductibles, many clients will back away from the HDHP immediately. So in selling these plans, you need to focus your client’s attention on the aggregate cost associated with his traditional plan—premiums, deductibles and co-payments—and his total exposure. To get his attention, point out that a family of four with a traditional plan would pay, on average, almost $11,000 in premiums annually. With an HDHP, the premiums would be much lower, as would the client’s total exposure.
You should also be prepared to hear from clients after their first visits to the doctor and the pharmacy. Clients are reluctant to part with more money for office visits than when they had traditional plans and often forget about the money they’ve saved in premiums. “I encourage clients to put those savings right into their HSA and remind them of the savings when they complain about having to pay more for an office visit or a prescription,” says Dorsey.
Break the co-pay habit
Many consumers have become conditioned to expect a health-insurance plan to have a co-pay feature; they think it’s a real deal. After all, their explanation of benefits shows the visit to the doctor cost $139 and their co-pay was a mere $35. Rarely, Dorsey says, does anyone scrutinize the EOB and find that the insurance company’s negotiated rate was $50. Or, that the co-pay for a medication was $75, but the insurance company’s negotiated rate was $60. “With a traditional plan, there is no end to the co-pay,” says Dorsey. “With an HDHP, a client is 100 percent covered once the deductible is met.”
Ask your client how often family members visit a doctor, advises Dorsey. Typically he’ll answer once a year—if that—for adults and several times a year for children. Then underscore the burden of the co-pay by noting that the family of four would need to make numerous office visits a month to break even on premiums.
Clients for life
Selling the HSA component can be a breeze when the client realizes that his tax-free contributions roll over from year to year. Watch out for clients who assume that HSAs are like flexible spending accounts that must be spent within a 12-month period or clients who doubt their ability to make the contributions. Forty percent of Dorsey’s HDHP clients were previously uninsured and convinced they couldn’t afford an HDHP. He stresses to his clients that annual HSA contributions may be made until April 15 of the following year. Dorsey found that saving a client money engendered trust and made him open to purchasing other products. It also led to more business through referrals.
When selling HDHPs to groups, the key is impressing the employer and employees with the potential savings. If the premiums are paid by the employer, Dorsey encourages the premium savings to be passed along to employees in an employer contribution to HSAs. “This can also get employees into the habit of regularly contributing to their HSA,” he adds.
The shape of things to come.
As premiums for traditional plans rapidly rise and employer contributions shrink or disappear, Dorsey believes the HDHP will become the dominant plan in the future. “I’ve had groups that were half PPO and half HDHP one year and three-quarters HDHP the next,” he says. “My agents tell me repeatedly that more and more people are asking about HDHPs. Getting people on board is a matter of education—once people understand the plan and the savings it offers, they’re all for it.”
Janet Wagner is a contributing editor to Advisor Today.
November/December 2007
The Art of Persuasive Selling
When Your Client Is Older
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