Medicare Advantage Plans are on the rise. With the expected growth, what does this mean for the insurance industry, and how can you plan for the future?
The Medicare Advantage landscape
In 2020, nearly four in ten (39%) of all Medicare beneficiaries—24.1 million people out of 62.0 million Medicare beneficiaries overall—were enrolled in Medicare Advantage (MA) plans; this rate has steadily increased over time since the early 2000s.
Between 2019 and 2020, total MA enrollment grew by about 2.1 million beneficiaries, or 9%—nearly the same growth rate as the previous year.
According to The Congressional Budget Office, the share of all Medicare beneficiaries enrolled in MA plans will rise to about 51% by 2030.
These trends emphasize the fact that marketing Medicare Advantage plans will be extremely important for the insurance industry going forward.
Audience insights: What to highlight in your marketing materials
Within the different age bands, there are characteristics and attitudinal differences that will impact how you target and communicate with individuals. For example:
Ages 65–69: This segment’s priority is health maintenance. Highlight the importance of preserving their health as they age by focusing on prevention topics, wellness incentives, healthy eating recipes, and stress management (as many may still be working).
Ages 70–75: Many in this segment are being diagnosed with a chronic disease (prediabetes being a common occurrence in this age bracket). Emphasize disease management programs or new disease findings that you can share. Inform them of where they can stay involved in their community through social activities (some even led by health insurance brokers) and expand their knowledge around caregiving and home health options.
Ages 76 and older: At this stage, it is helpful to emphasize the importance of benefits, coverage, and potential savings. Members at this age visit a doctor an average of nine times per year. Additionally, highlight the care management and virtual or in-home options available, behavioral health and pharmacy medication therapy management (MTM) programs, and end-of-life or hospice coverage.
Three key focus areas to attract and retain members
Attracting new MA members and retaining the ones you have requires preparation, investment, and planning. Here are three key areas of focus to get started:
- Big data: A comprehensive approach using multiple sources of data, like zero-party data, to combat Social Determinants of Health and the impacts of COVID-19 are key in this cycle year’s MA offering. This includes components that will optimize the ability to engage with and connect people at risk of social isolation and loneliness, inform and enable the improvement of health outcomes for those managing chronic conditions, and utilize technology that allows interactions at lower costs, such as home visits facilitated through community resources, card groups, church groups, or in-home care managers.
Digital/tech enablement: As seniors become more comfortable with technology, they will increasingly rely on emerging devices and systems for health solutions. For example, wearables can provide seniors with simple ways to help keep track of their basic health information (e.g., heart rate), alert them if something is wrong (e.g., dehydration), and easily share that information with doctors for an in-person appointment or virtual visit. Based on a study by the American Association of Retired Persons on 2020 tech trends, three in four older Americans want to stay in their homes and age in place, and technology that allows them to get help in an emergency or track their health virtually can be critical to helping them achieve that goal. About 40% of respondents indicate they were interested in using technology that would remind them to take their medication while seamlessly notifying their healthcare provider at the same time.
Brands must remember that many seniors are tech novices. It will not be enough for brands to simply provide seniors with tech solutions; they will also have to educate seniors around usage. This cannot be limited to a standard user’s manual, however, and brands must go above and beyond to provide this group with more personal attention (like call support) to walk new users through set-up and usage.
- Network adequacy: The patient-provider relationship is still a driving factor as consumers convert from other product lines into MA. Highly related specialists need to be in the network. This means access to top doctors, data sharing within a large ecosystem, and strong networks. Fringe offerings like over-the-counter support, gym, meal guidance, and behavioral health options, as well as user-friendly portals and building a sense of community, are critical in creating a thriving network experience.
Key success factors and selling points
From internal resources to external programming, there are several success factors to consider as you plan to successfully launch or grow your MA offering:
Insurance brokers: With eligible prospects beginning to roll off group insurance and onto MA, consumers seek trusted sources who can help them through the enrollment process. Through enrollment information, plan design, and benefit detail, support for this group will aid in the sales process.
Pharmacy: One key reason why members would choose an MA plan over Medicare is because the pharmacy benefit is part of the cost. Much like commercial payers, it often includes a copay but eliminates concerns around a “donut hole.” Due to the rise in copayment of drugs for seniors who, as they age, also tend to have the highest pharmacy-related costs, payers are moving in two different directions:
First, many are opting to be their own Pharmacy Benefit Manager (PBM), some even as a specialty pharmacy. In this case, there is a retail fill option, but the savings to the consumer comes in the form of using that PBM to order and supply the medication. When using either a partner PBM or an owned PBM, there is the option for 90-day fills on generics or maintenance drugs that also add up to a lot of savings for both member and payer.
Second, many of the national MA payers also have recognized retail partners that have negotiated lower drug rates for volume based on plan size while not being seen as steerage due to other options being available. Finally, since spending on pharmacies is one of the largest expenses to a payer, they often have MTM programs built into the benefit.
Regardless of enrollment, in-care management means that the internal Pharmacy Reconciliation team approves and handles appeals on medication, manages controlled substances or specialty drugs, and offers counsel to those that have adherence issues or known side effects.
Digital ecosystem: Newly-insured MA members will expect a smooth digital experience and access to platforms that are easy to navigate. Assess your current ecosystem and user experience annually, including website navigation, mobile platforms, and your member portal to ensure you are connecting with members and guiding them through a frictionless, omnichannel experience.
Create retention strategies: New members, especially Medicare members, are more likely to be disenchanted. Demonstrate that your organization understands the intricacies of this group and that they are part of something beneficial, healthy, and positive. If you only communicate with them once a year, they are likely to feel neglected—when the next Annual Election Period (AEP) rolls around, they could switch to a different plan that engages them more. In addition to ongoing communications, develop an artificial intelligence (AI) or chat function to open the dialogue and address member needs in real-time. Not all members want to be treated the same, however. Transactional and investment data, online profiles, life-stage indicators, and monitoring members’ promotion history will help you deliver personalized and, ultimately, better experiences to members.
Wellbeing and benefits: Invest in product design processes and focus your efforts on the benefits that members use frequently (e.g., PCP copays, formularies). This will have the dual benefit of attracting new MA members while improving member experiences once enrolled. Additionally, perks and programs are essential to building long-standing relationships with members. The Silver Sneakers Program®, wellness rewards, and 24/7 online or in-person support are some of the ways you can develop and sustain Participation. As you explore beyond the essentials, consider ways to build community and programming in-person and online, so members have a place to connect with others. Test your approaches to engaging with members and potential members—to learn what types of engagement and communication work best: create pilots, test sample data, and conduct member surveys to understand the impact of everything you do.
Brand recognition: Even outside of the AEP, there are endless reasons why you should confidently promote your core values. The strength and recognition of your brand will give you a competitive edge, and your brand promise will close the deal. Developing the right product and network design is a great start to getting members into a plan, but a significant investment in raising consumer awareness and optimizing the distribution strategy is also required. Those who are aging-in should begin to see your brand be present and active in their life as they begin to think about retirement and moving into a MA plan.
Alignment to community organizations: Choose community partners and organizations that seniors recognize. Understand the Social Determinants of Health so you can find partners who support programs, practices, and policies to address the health and wellness of your segment.