Change Is Imminent, Are Health Plans Prepared for the Future?

Below is an article by Empara CXO Ben Callaghan in Healthcare Business Today.

The foundation of traditional health insurance crumbling. Public outcry has reached a breaking point—members are drowning in administrative complexities, surprise medical bills and approval delays that make accessing care an uphill battle. Employers, equally frustrated, are actively seeking alternatives. A recent study confirms what some industry insiders fear: employers are fleeing traditional insurance models at an alarming rate.  

The rise of Individual Coverage Health Reimbursement Arrangements (ICHRA) and other self-insured models isn’t just a trend—it’s an existential threat to third-party administrators and health plans that rely on large employer groups for survival. From 2023 to 2024, ICHRA adoption surged by 30%. For smaller health plans already teetering on profitability, this shift could be the final blow. As premium hikes continue, businesses are making strategic financial decisions, leaving outdated models behind.

Meanwhile, the largest insurers claim they’re shifting toward member-centric strategies, but will they truly deliver? Cigna recently pledged greater accountability amid growing scrutiny of insurer practices. While the right buzzwords are there—transparency, better support, improved access to care—members are waiting to see meaningful action. 

On the regulatory front, government action is ramping up. The Trump administration has doubled down on healthcare transparency efforts, pushing policies that require clearer pricing structures and increased accountability for insurers. These reforms aim to empower consumers with more information, but the burden remains on health plans to execute these mandates effectively. 

The industry is at a tipping point. Without adapting services and technologies to continue to add value in this ever-changing market, many smaller plans and TPAs could be left behind. Adopting new technologies that power services and operations may be the key to reducing operational friction, enhancing member engagement and restoring trust before the market leaves them obsolete. 

For those resisting change—slimming capability to cut costs and treating products or key business components as a mere “box checked” or “good enough”— the clock is already running out.

Improving Customer Satisfaction and Trust with AI: A Health Plan Roadmap

AI-Driven Solutions for Enhancing Member Communication and Engagement

For many health plan members, frustration doesn’t start with a denied claim—it starts long before they even use their benefits. Unlike other major purchases, buying a health plan often feels like a blind gamble. Members spend thousands of dollars a year on coverage yet understand shockingly little about what they’re actually buying.

Even after enrollment, accessing clear, timely information remains a battle. Need to confirm coverage? Expect hours on hold or a frustrating maze of automated phone prompts. Used your benefits? It could take weeks—or even months—to find out what you actually owe. The lag in feedback loops leaves members financially and medically vulnerable, delaying care and blindsiding them with unexpected out-of-pocket costs.

The system is so broken that errors aren’t just common—they’re expected. Some bills never arrive at all, while others show up long after care has been received. For an industry built on risk management, health plans themselves are becoming the biggest risk—to their members’ financial stability, access to care and trust in the system itself.

AI-powered virtual agents can help to alleviate these pain points by providing real-time, 24/7 personalized support. By leveraging natural language processing, AI can interpret member inquiries in multiple languages and deliver clear, concise answers about benefits, coverage and costs—without the need for excessive wait times or administrative hurdles.

Beyond reactive support, AI-driven engagement tools can proactively assist members by simplifying benefits explanations, identifying cost-saving opportunities, and offering tailored guidance whenever a member needs it. 

Streamlining Prior Authorizations with AI: Reducing Delays and Costs 

Prior authorizations (PAs) remain a top challenge for both members and providers. According to a KFF report, insurers fully or partially denied 3.2 million prior authorization requests in 2023, delaying necessary treatments and increasing administrative burdens.

AI can streamline prior authorizations processes by:

• Automating Decision Support: AI models trained on historical claims and clinical guidelines can instantly approve low-risk or routine PA requests, reducing manual reviews.

• Predicting Approval Likelihood: Predictive analytics can flag which requests are likely to be approved, helping providers submit cleaner applications and reducing denials.

• Enhancing Documentation with NLP: AI-driven natural language processing (NLP) can extract relevant data from electronic health records (EHRs) and match it with insurer policies, streamlining submissions.

• Providing Real-Time Updates: AI virtual assistants can notify members and providers about the status of PA requests, minimizing the need for follow-ups.

• Reducing Errors and Fraud: AI can detect inconsistencies, missing information or potential fraud in submissions, ensuring compliance and preventing unnecessary denials.

AI-Powered Price Transparency and Cost Navigation for Health Plans 

Another major pain point for members? The lack of clear, upfront pricing for healthcare services. Costs for the same procedure can vary drastically—even within the same city—leading to unexpected medical bills and financial strain.

AI-driven transparency tools are changing this dynamic. By integrating real-time network rates with a member’s benefits data, these tools provide personalized cost estimates before care is received. This allows members to compare providers, understand out-of-pocket expenses and make cost-effective healthcare decisions with confidence.

Additionally, AI solutions are beginning to incorporate provider quality scoring—an area ripe for improvement in healthcare. While consumer ratings are common in other industries, healthcare has lagged behind in standardizing quality metrics at scale. AI-driven analytics can bridge this gap, helping members shop for high-quality, cost-effective care options.

Expanding AI-Driven Member Services: A Smarter Approach to Care Navigation 

Cigna has acknowledged that members with complex conditions, like cancer, require more navigation assistance. But the reality is every member needs better support—not just those with the highest claims. The challenge? Traditional advocacy models are too resource-intensive for some plans to scale effectively, often reserving utilization management resources for high-cost claimants or procedures. That’s where AI changes the game.

AI-driven member advocacy doesn’t just improve care navigation—it enables scale. Instead of limiting hands-on support to high-cost members, AI-powered solutions can proactively assist every health plan member, reducing confusion, preventing costly surprises and improving the overall experience without exponentially increasing administrative costs.

With the right AI-enabled infrastructure, health plans can transform member support at every level:

• Proactive Care Navigation at Scale: AI anticipates healthcare needs, helping all members—not just the sickest—make informed decisions before a crisis hits.

• Personalized Support Without Resource Drain: AI-powered platforms can combine virtual and human advocacy, efficiently resolving billing issues, provider selection and benefit optimization.

• Smarter, Faster Call Center Support: AI doesn’t just route calls—it helps handle them. Virtual agents respond in 9.3 seconds vs. 39 seconds for a human, improving member satisfaction, reducing call volume and cutting support costs by 20–30%.

Health plans can no longer afford to reserve high-touch advocacy for only the most expensive cases. AI is the key to scaling member support without scaling costs—turning personalized guidance into a standard, not a privilege.

The Future of Member-Centric AI: Empowering Health Plans and Their Members

AI isn’t just about automation—it’s about making healthcare work better for people. Health plans are drowning in complexity, from navigating regulatory changes to managing an overwhelming volume of member inquiries. AI-driven tools provide administrators with the instant access they need to truly understand problems, analyze vast data sets, automate repeatable processes and generate context-rich insights about members or member groups.

With AI, health plans gain immediate insight into member needs, synthesizing claims, benefits, and real-time interactions to surface relevant, actionable information. Instead of relying on outdated, manual processes, AI accelerates decision-making, identifying patterns, risks, and opportunities within massive data sets in seconds. This shift doesn’t just streamline workflows—it allows teams to focus on solving real member issues rather than getting buried in administrative tasks. AI-driven support is also more intelligent and context-aware, delivering personalized guidance based on individual or group-level needs, rather than forcing members through one-size-fits-all solutions.

The future of healthcare isn’t just about coverage—it’s about delivering care in a way that’s simple, transparent, and truly member-centered. Health plans that leverage AI today will not only restore trust and improve member experience but will also build a more sustainable and efficient healthcare system for the future.