Insurers Face Challenges in Attracting Consumers to Exchanges

Carriers will face significant challenges and new competition in attracting and retaining customers in the exchanges, according to a study by PwC’s Health Research Institute. “Large national insurers and new players, some from other industries, are jockeying for position in the new exchange market,” said Ceci Connolly, managing director, PwC’s Health. New exchange entrants will include Medicaid managed care companies, new health plans run by large provider systems, healthcare start-ups, and non-insurer players, such as web brokers and tax preparers. Their participation won’t come without challenges, as many will need to learn how to operate in the new exchange market and manage the needs of a largely unknown population.

It will be crucial for insurers to invest in retention programs to gain the loyalty of a new crop of technologically savvy buyers. Companies should think beyond initial implementation challenges and focus on building a meaningful customer experience, with an eye on cost reduction and personalized communication, said Connolly.

For the study HRI interviewed insurance executives, consumer experts, and health policy leaders about exchange strategies. The following are some key results:

  • 69% plan to offer coverage on the exchanges, reflecting the rising significance of this new business opportunity
  • Ten of 18 national health insurer executives say their companies won’t offer exchange coverage in all the states where they have business, and 50% expect to enter additional states after 2014.
  •  63% say technology integration is a major barrier to implementation; and 61% cite coordination of subsidies.
  • Only 34% say understanding newly eligible customers is a major barrier to implementation, suggesting they may not thoroughly understand the challenges.
  • 91% expect premium costs and total out-of-pocket costs to be what consumers care about most. Yet, industry and consumer experts expect the ultimate differentiators to be factors, such as personalized communication, tangible rewards and health management programs, and brand recognition.

Sandra Hunt, principal with PwC’s Health Industries practice said, “Organizations that are planning to offer coverage on the exchanges should prepare to compete in new ways to earn consumers’ business and loyalty. Transparency around pricing, quality, and customer satisfaction should be foremost in their minds as consumers become much more aware of the cost of healthcare and how to access it.” For more information, visit

Last Updated 01/19/2022

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