Difficult Renewals: Navigating the ‘No’
It’s renewal time again. Time for brokers to crunch the numbers, prepare their pitch and brace themselves for another difficult renewal meeting where they report yet another annual increase. New year. Same old challenge. Because today, bringing forward a standard solution almost always means presenting an increase. A study published in the Journal of the American Medical Association (JAMA) says that healthcare spending in the United States rose nearly a trillion dollars from 1996 to 2015. The price of health insurance premiums has gone up right alongside it.
Yes, there are things you can do to help soften the blow. Like increase employee payroll contributions or out-of-pocket expenses. Raise the deductible or change the coinsurance to shift even more of the cost. (How many of us have sat in meetings where moving another “couple percentage points” to the employees really won’t be a “big deal?”) Or you can adjust what your customer contributes to the premium.
If your clients are with a BUCA plan (Blue Cross/Blue Shield, UnitedHealthcare, Cigna or Aetna), you can farm out the quote to see if switching to one of the other carriers makes a difference. It’s the same cycle, year after year after year.
And then there’s the process itself. You’re talking to the business owner, CEO or CFO who is mainly looking at the financial impact. But you also have to understand the concerns of the HR team. Their primary focus is keeping employees happy with the plan, day in and day out. They want it to be easy to use and administrate. Benefits can be noisy.
That’s a lot to contend with. What if the initial answer is, “No. These renewal increases are just too much. I can’t buy that.” If your customer says, “You’ve got to find me something else,” are you prepared to respond?
The answer may not be as difficult as you think. Business owners are so fed up with continuously rising premiums that they’re open to options. A 2017 McKinsey & Company survey measured employer interest in new healthcare delivery and payment models at nearly double that of the preceding five years.
They’re eager to hear about innovative plans that can reduce the cost of care, including alternative network or payment models. For a fully insured group, self-funding’s documented savings can be especially eye-catching. These plans can look and feel familiar to the HR department and employees, with a member card, a provider network and a similar claims processing routine. Yet they offer more flexibility and visibility into their cost drivers.
It’s important to think about timing too. Your best strategy might not be to wait for that “no” before you offer up another solution. Customers always appreciate the broker that comes in with real options; the one who shows they’re thinking of the client’s best interests before a crisis hits.
Here’s how you can do it:
Even if your client doesn’t make a change this year, it’s your job to show them viable alternatives so they understand all the options available to them. When the time comes for a more aggressive approach, they will remember that you were way ahead of the game.
Bottom line, the best way to navigate the ‘no’ is to plan ahead. Walk into that pitch bringing not just what your client is accustomed to, but also better ideas for the future. That’s going to be different for each one. But these days, it’s probably going to include strategies that can give them more control over costs as well as the quality of healthcare for their employees. More and more employers are realizing the risks associated with the status quo. They are asking for more innovative and aggressive approaches. Leading brokers and consultants are getting to ‘yes’ by capitalizing on this major shift in the market.
Get more information about how self-funding options can help your customer’s business and yours in our new broker guide: “Your Client Cleared the Self-Funding Hurdle. Now What?”