It’s no secret that the senior population is growing much faster than the rest of the population. By 2030, when all Baby Boomers will have reached age 65, one in every five Americans will be eligible for Medicare.
“The aging of baby boomers means that within just a couple decades, older people are projected to outnumber children for the first time in U.S. history,” reports Jonathan Vespa, a demographer with the U.S. Census Bureau. “By 2035, there will be 78 million people 65 years and older compared to 76.7 million under the age of 18.”
Medicare providers can capitalize on this growing segment by attracting age-in consumers and meeting the needs of Medicare Advantage members who are shopping and switching carriers and plans at increased rates.
Challenges presented by consumers aging-into Medicare
With 10,000 age-in consumers enrolling in Medicare daily, providers have the daunting task of attracting and educating an enormous influx of potential customers. Additionally, 30 percent of enrolled members shopped for a new carrier or plan during AEP 2019, citing fixed incomes and a desire to save money wherever possible.
According to the Kaiser Family Foundation, one in three Medicare beneficiaries is enrolled in a MA plan, nearly double what it was a decade ago, with continued growth expected. Enrollment grew 8% between 2017 and 2018, matching the prior year’s growth. From the consumers’ perspective, Medicare is a maze of costs, deductibles, coinsurance and copays. Then add in Medicare Advantage or Medicare Supplement plans, and it’s no wonder why seniors have a litany of (legitimate) complaints:
- Overwhelming marketing messages and outreach
- Unfamiliar language and terminology
- Difficulty comparing plans and providers on paper
- Inability to understand out-of-pocket and total plan costs
- Confusion in locating in-network and out-of-network providers
- Complexity in determining medication coverage
- Finding supplement benefits, like dental and OTC drug coverage
- Lack of human support
Opportunities for carriers and brokers
Opportunities exist for attracting and capturing new beneficiaries, along with retaining current members. Some interesting trends point to these new opportunities:
- Importance of SEP marketing
With a full 50 percent of MA enrollments occurring outside the AEP, savvy marketers know that new member acquisition is a year-round endeavor.
ConnectureDRX bridges the knowledge gap for age-in consumers with valuable, helpful tools that enable easy plan and drug cost comparisons. Accurate drug costs and out-of-pocket estimates, along with a personalized shopping experience, directs consumers to their best fit plans.
- Expectation for Online Shopping
According to PEW research, 75 percent of those aged 65 and older are online at least once a day, with an even higher percentage (82 percent) of those ages 65-69.
In the last six years, online health insurance shopping has increased a formidable 350 percent, with a resounding 50 percent shopping or health insurance online in 2018. Consumers are taking advantage of digital tools to help them choose between complex insurance products, as carriers seek to differentiate by offering no-cost premiums and supplemental benefits.
Today, seniors expect a seamless, end-to-end digital experience. Connecture’s Quick Quote, used by many brokers, is meeting this need, as evidenced by a 13 percent in traffic and a 10 percent increase in enrollments in 2018.
- Understanding Shopping & Switching Behaviors
There are always “second chances” to land new members during the AEP. After a continual decline in switching rates since 2015, the MA switch rate jumped up 12 percent in 2018.
“Conducting due diligence” is the most common reason members give for shopping their MA options. Deft’s 2019 Medicare Shopping and Switching Study revealed that 39 percent shopped to ensure that their 2018 coverage was still the best plan for them in the new year. Seniors are “chronic shoppers,” continually looking for ways to save money while living on a fixed income.
With the upturn in supplemental benefits, members need a comprehensive, easily understood means of evaluating their options.
While the challenges are great, the opportunities to attract age-in consumers and due-diligence shopping members are numerous. The key is providing a seamless, online experience that enables consumers to find the best fit plan for their health.
Sources:
https://www.census.gov/newsroom/press-releases/2018/cb18-41-population-projections.html
https://www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-advantage/
Deft Research 2019 Medicare Shopping and Switching Study
Connecture Platform Analysis & Consumer Megatrends Study