By Jayne O'Donnell
Theresa Pugh stopped at a store near Lord & Taylor after eating at the restaurant a few doors down.
She picked herself up a supplemental Medicare plan from the Horizon Connect store.
"There's so much going on with health care in our country right now, I needed to go with someone that I trusted," says Pugh, of Mount Laurel, N.J. "I just felt like I wasn't being sold a bill of goods."
Call it the retailization of health insurance.
Shopping center owners may not be courting them as they would Apple or trendy fashion brands, but health insurers are increasingly opening stores alongside far sexier retail tenants.
With few people buying health insurance on their own, insurers have long focused on retaining and attracting the companies that offer it to their employees. Now, however, the new health law known as the Affordable Care Act means most uninsured Americans are required to have insurance beginning March 31 or pay a penalty at tax time in 2015.
Insurers need to sign up as many healthy, younger people as they can to pay for all of the older, sick customers they will be taking on. The law prohibits insurers from denying people insurance because of pre-existing health problems and limits how much more they can charge older than younger people.
So, for the first time, insurers are fiercely competing to attract individual consumers and turning to traditional retail marketing techniques to do so, luring them into stores with special events and using splashy advertising. As any retailer knows, they have the greatest chance of converting shoppers to customers once they have them in their retail locations or on their sites.
"It will be a departure for a lot of these insurance companies," says Farzan Bharucha, health care analyst with consulting firm Kurt Salmon. "Some insurance companies have been more progressive at consumer-directed health plans than others and some have done more marketing."
The stores can be a place for insurance clients to meet face to face with company representatives to discuss claims and benefits, but they are now seen as a way for the newly consumer-focused insurers to draw the uninsured to the plans they are offering in state exchanges starting Oct. 1.
They're "a cross between banks and H&R Block," Bharucha says. "This is not a Neiman Marcus."
Other insurance activity at the shopping center:
â?¢Blue Cross Blue Shield of North Carolina will open its third retail store Friday and plans to open seven more by the end of the year. The company has also launched a "Ready, Set, Go" online and event marketing campaign to coincide with the law's implementation. "Our representatives are looking to inform (customers) of all their options," spokeswoman Ryan Vulcan says. "People are looking to get answers about coverage for today and for what's forthcoming."
â?¢United Healthcare has more than 20 retail locations now in states including Missouri, Nevada and Texas. The first was opened in the Chinatown section of New York City 20 years ago and the most recent was in Los Angeles.
â?¢Highmark Health Services, also a Blue Cross Blue Shield provider, has 10 retail outlets in Pennsylvania. Highmark opened its first two Highmark Direct stores in March 2009 and has been adding more as the implementation of the law neared. The company says the stores have had more than 230,000 visitors and thousands have purchased health insurance. Blue Cross Blue Shield affiliates also have stores in Florida.
â?¢Jones Lang LaSalle, which leases and manages 245 shopping centers in the U.S., is working with three major insurers it won't name on a retail pilot program, says Executive Vice President Walter Wahlfeldt. When he asked the companies why they were interested in retail, Wahlfeldt says they told him, "The health care reform act - there's a lot of confusion for a lot of people."
"Baby boomers prefer to purchase differently than their parents," Wahlfeldt says. "They're not comfortable with people coming to their home and are more comfortable with retail settings."
Mark and Donna Tatulli and their three children had been without health insurance for a few weeks when Donna visited the Horizon store. Mark, a children's book author and syndicated cartoonist, quit his day job last month to focus on a book launch. Donna knew they were eligible to buy on her state's health exchange next month but didn't want to wait until the deadline for coverage.
"You worry about the catastrophic event that will just destroy your whole life," Donna Tatulli says.
Consumer advocates are worried the new stores will attract uninsured people who should be shopping on their state's health exchange, where they can compare all the plans offered for sale starting Oct. 1.
"You want them to compete," says Ron Pollack, executive director of the non-profit health care group Families USA. "If you're buying a TV or a car, you don't look at one brand of TV or one make of car."
Pugh's purchase wasn't exactly on impulse - she was about to turn 65 and become eligible for Medicare. Overwhelmed with all the offers she was getting from insurance companies, she wanted a real person to sort it all out.
Even if she could have saved money by shopping around, buying at the Horizon store was "worth it because of the comfort level," says Pugh.
Because most insurers sell other kinds of insurance, Bharucha says he expects insurers will start looking at "the "lifetime value of customer" and how to retain them and sell them other products, such as life insurance.
"Insurers haven't tried to follow them and go through the thought process, 'How do I keep this patient?'" he says.
With a location that's "a long stone's throw" from Best Buy and attached to a busy shopping mall, the Horizon Connect store is capitalizing on its location.
"Black Friday was one of our bigger days," Joe Albano, vice president of consumer and senior markets for Horizon Blue Cross Blue Shield of New Jersey says of the busy shopping day after Thanksgiving. "It's the curiosity of the pop-in. People are trying to figure out what we are."
Source: USA Today
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