To stay competitive in tomorrow’s Medicare Advantage (MA) marketplace, plans need finely tuned strategies for each of these four MA opportunities.
As its 20th anniversary quickly approaches, Medicare Advantage (MA) has surpassed 28 million members and 46 percent of eligible Medicare beneficiaries now choose an MA plan. The average Medicare beneficiary has access to over 40 plan options, many providing extra annual benefits valued at $2,000 compared to fee-for-service Medicare. Ten companies account for 80 percent of MA enrollees. The competitive landscape has never been tougher.
To stay competitive in tomorrow’s MA marketplace, plans need finely tuned strategies for each of these four MA opportunities:
1. Catch newbies: With about 4 million Americans turning 65 every year, this group is MA’s growth opportunity. While AEP continues to be an important customer acquisition time of the year, fighting over fewer and fewer AEP switchers becomes a long, difficult slog. Individuals turning 65 choosing a Medicare plan for the first time, and late market enrollees (aka, late entrants, or late retirees) are the future for MA. For consumers, making the wrong Medicare insurance choice when they first enroll can be costly, they want and need help. Plans with group and individual business have the extra advantage of capturing this ‘same brand’ existing customer cohort with an internal Medicare cross-selling transition approach. However, the industry isn’t doing well here: only one-third of Medicare enrollees went to a plan with their same group or individual carrier.
Takeaway: Grabbing consumers at their first Medicare enrollment decision is a year-round, always-on effort with significant lifetime value.
2. Remove friction: Customer experience (CX) has been getting a lot of lip-service, but now it’s time to deliver on high-performance CX. Superior customer service goes a long way toward not only a top-level Star rating, but it’s an essential part of customer retention and loyalty. Simply put—make sure AEP switchers aren’t yours! Why pay the high price of acquiring new members just to see them walk out the back door? Investments in removing ‘points of friction’ throughout the MA journey, particularly inside your customer service organization, translate into improved profitability. Even ‘satisfied’ customers walk out the door; ‘satisfactory’ performance is no longer enough to retain members. Once an MA plan has a ‘retention problem’ retroactively trying to keep members from leaving isn’t the answer. Rather, proactively delivering meaningful value and experiences that make members want to stay in the first place is a winning CX strategy.
Takeaway: CX represents an MA plan’s brand, it’s a marketable attribute that gets attention, and with recent adjustments to the new Star rating guidance, having happy customer pays off big.
3. Embrace “AgeTech”: Plans must invest in adapting to a more sophisticated, digital savvy Medicare customer. Today’s senior is more connected than ever with most owning a smartphone and going online every day to shop or search health-related websites. Accelerated by the pandemic, MA plans saw telemedicine and virtual office visits skyrocket, and while it has tempered, it’s now a permanent part of the patient journey. Similarly, MA markets are seeing a surge of ‘virtual first’ benefit plans. For seniors, digital health has carved out a special niche: AgeTech. It includes everything from wearables to sensors to smart home reconfigurations. And, it’s addressing a broad range of health issues including brain health, caregivers, socialization, fall prevention, and end-of-life. As the nation’s largest health care payer, Medicare, with more than 63 million beneficiaries, sees digital health solutions as a valuable tool to empower consumers, improve quality, and reduce costs.
Takeaway: Medicare members are looking for best-in-class digital experiences from their favorite retailer and from their health plan: convenience, immediacy, and personalization.
4. Cultivate partners: Big (and small) retailers are now in the Medicare game. They are either underwriting MA plans, selling plans through in-house agencies, or engaging MA customers through branded primary care clinics, or low-cost pharmacy services. During AEP, these partnerships meant stores had pop-up MA sales kiosks with agents and/or business reply cards, co-branded website tools and advertising, and pharmacist or clinic staff with “Ask Me About Medicare” buttons. For MA plans, exploring partnerships or joint ventures with national, regional, or local retailers is simply smart business. Collaboration is also being leveraged with hospital systems and primary care physician networks. Aside from risk management alignment that comes with a payer/provider relationship, provider brand equity and trust can be a significant lead generation asset. Partnerships bring scale, financial efficiencies, and a better ability to address consumer demands for convenience, continuity, and consistency.
Takeaway: Collaboration can yield big rewards for MA plans: open new markets, extend product or service offering reach, and for consumers, better managed and more affordable health care.
Staying competitive in an increasingly commoditized, fast-paced growth market challenges even the best in the business. As MA plans strategize around their 2022-23 market moves, discipline around operating excellence, marketing and sales alignment, and customer centricity has huge payoff. It’s the difference between continued profitable growth and a slow slide into obsolescence.
About the author
Lindsay Resnick, executive vice president at Wunderman Thompson Health, is a recognized leader in the health care and insurance sectors. Since 2010, he has been part of the senior leadership team at Wunderman Thompson Health, a health care marketing and advertising agency that combines strategy, creative, data and technology to build health care brands and inspire consumers and professionals. Areas of focus span the payer, provider, and health technology landscape and include consumer data and insights, competitive intelligence, brand direct marketing, customer experience, and sales optimization.
Resnick is a mentor at MATTER, a health technology incubator helping entrepreneurs with early-stage companies go-to-market. He has also mentored at Healthbox. He has served on the advisory boards of HMS Federal and Zipari.
Previously Resnick held senior executive roles at Weber Shandwick, Gorman Health Group, Healthmarket, and Celtic Life Insurance. Early career experience included Blue Cross Blue Shield Association, Massachusetts Department of Public Health, and Massachusetts General Hospital.
Resnick has a Masters in Health Administration from Washington University in St. Louis and a Bachelor of Science in Business Administration from Northeastern University in Boston. As an influencer and connector with over 15,500 LinkedIn connections, he is a frequent speaker and author on topics in healthcare, insurance, marketing, and sales. Originally from New York, with stops in Boston and St. Louis, Resnick is now a deep-rooted Chicagoan.