NEWS & UPDATES

What Does Today’s Postage Increase Mean for Your Health Plan?

As you may be aware, the USPS raised postage rates effective August 29, 2021. With health plans continually working to reduce operating costs, this news is especially challenging since postage makes up a large percentage of an organization’s communications budget. The postal rate structure can be very complicated. To better understand the potential impact of this upcoming postage, increase on your business, please review the simplified snapshot below:


SIMPLIFIED SNAPSHOT OF HEALTH PLAN POSTAGE INCREASE:


(The below information does not include many of the ancillary surcharges that may impact rates but focuses on the primary items that will impact your plan directly.)


For First-Class Mail:

  • USPS is raising the price of stamps 3 cents.

  • Meter price will increase 2 cents.

  • First-Class flats will incur a 10.3 percent increase.


For Marketing Mail (Standard):

  • Overall average increase of 6.8%.

  • Certain subclasses such as flats will incur an 8.819% increase.

  • Parcels will receive a significant increase of 9.3%.


As health plans typically mail a large volume of kits and packets (flats), along with many daily letters, this increase may appear daunting! Command Directs experience with over 40 health plans and our comprehensive outbound mail analysis, has made one thing very clear: There are regularly several untapped opportunities to dramatically reduce postage costs.

DON’T IGNORE THE POTENTIAL SAVINGS!


When Health Plans leverage a postage-reduction strategy, the results are invaluable. To maximize the benefits, these methods should become a part of the organization’s workflow, ensuring all outreach and new initiatives are designed and planned with postage savings in mind. All internal departments and outside resources need to be consistently working within the guidelines of the strategy.


A STRATEGIC APPROACH TO POSTAGE REDUCTION:

  1. ADDRESS CORRECTION SERVICES Incorrect addresses and returned mail are the number one causes of wasted dollars for almost every mailroom. Aside from the lost postage, the printing, mailing, and labor costs associated with returned mail is incredibly expensive. In addition, managing return mail creates havoc for most mailrooms, which delays the address correction process. This inefficiency creates a never-ending cycle of wastefulness. The solution begins by identifying the data correction requirements by line of business. Medicare and Medicaid have conditions relating to the address correction process. These conditions are standardized and easy to define. Next there needs to be a process to regularly validating address via USPS postal software. This process is typically performed weekly or monthly on the entire member roster or only as pieces are mailed. Once data is corrected, it is critical that the corrected data be provided back to the plan immediately for updating. This may come in the form of an FTP upload or API.

  2. ONGOING REVIEW OF MATERIAL SIZE, WEIGHT, AND MAIL CLASSIFICATIONS Often mail pieces are designed to be creative and impactful, but health plans have not considered the postage ramifications. Piece size, orientation, folding, and weight each have a major influence on the bottom-line cost of your project. These variables must be considered prior to production as the savings can be dramatic. Postage is dependent on a broad range of variables. Due to the complexity of the options and regulations, along with lack of USPS direction, it is important that you partner with a mail expert to advise you and your creative team. Quiet often, simply folding a document, or making an adjustment to the paper weight can reduce postage with little or no impact to the effectiveness of the mailing. It is also important to minimize larger pieces as the costs increase dramatically when exceeding a 6 x 11 size. Finally, for outbound pieces that are not time critical, changing the mail classification away from first class may be valuable way to cut costs. The one common thread that ties all these items is to review your options with a mailing consultant prior to piece creation. USPS rules change and it is important that you are taking advantage of every discount.

  3. PRESORTING AND CO-MINGLING STRATEGIES Taking advantage of postal discounts is a critical component to avoiding excess postage. USPS certified software provides address validation, presorting for postal reduction and tracking services that should be incorporated into any organizations mailing strategy. For mailings that do not qualify for postal discounts, co-mingling services allow for discounts that leverage the overall volume of your mailing partner.

  4. ELECTRONIC NOTICING The future of member and provider communication is here. Now is the time to offer your members the option of electronic notices. When a member opts-in to receive mail electronically, the cost reduction to health plans is huge! Plus, members then have access to their documents 24/7, as well as eliminating the hassle of postal delays. Moreover, the benefits of providing members with a repository for all their documents will help to keep them informed and organized. The electronic notice will eventually become the standard for all health plans but the sooner you begin the process, the sooner the savings will begin.

Health plans perform due diligence on many purchases, managing overhead and operating expenses carefully. Ironically, one of the largest, daily expenditures often forgotten, because health plans are unaware there are measures available to reduce the expense with no concessions.

LET THE NEWS OF A POSTAGE INCREASE BECOME YOUR OPPORTUNITY TO START SAVING.

For more information:

Gary Bolnick

gary@commanddirect.com

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