When consumers shop for Medicare coverage is changing.
The private Medicare plan market is doing much
better than many other insurance markets, and insurers and distributors still
have room to improve Medicare plan marketing strategies.
Speakers gave agents and brokers a peek inside
the machinery last week, during a webinar organized by Connecture Inc.
Connecture offers systems that insurers and
exchange managers can use to get people into insurance plans, including Medicare Advantage and Medicare supplement (Medigap)
insurance plans.
George Dippel, a senior vice president at Deft
Research, talked about his company’s consumer survey data.
Connecture executives talked about what they
seen when they look at data for their own health plan customers’ web shoppers.
Hurricanes, low interest rates and turmoil in
Washington have been hurting the performance of many insurance markets,
including the individual major medical market for people under 65.
In the Medicare plan market, the regulatory
framework has been stable, increases in claim expenses have been modest, and
baby boomers have been turning 65.
Connecture reported in December that the
number of people enrolling in coverage through its systems during the Medicare
Advantage and Medicare Part D drug plan annual enrollment period for 2018,
which ran from Oct. 15 to Dec. 7, was 18% higher than the number who enrolled
through the company’s systems for 2017.
During the webinar, Connecture executives
reported that the number of consumers shopping through the web increased 32%.
The conversion rate, or likelihood that a
Medicare plan web shopper would actually buy coverage, increased 30%.
More information about the webinar is available here.
Here are three more Medicare plan shopper
insights, drawn from Dippel’s remarks and slidedeck, and from the Connecture
executives’ slidedeck.
1. When people shop for Medicare plans is
changing.
Only 24% of Deft survey participants said they
had started researching, or shopping for, Medicare plans 12 months before they
would turn 65.
A few years ago, about 40% of consumers would
have reported shopping for Medicare plans 12 months before they turned 65,
Dippel said.
The percentage of 64-year-olds who have shopped
is falling because so many more consumers are working past age 65, Dippel said.
For Medicare plan marketers, he said, the key
message is that they have to do more to reach people ages 65 and older, not
just 64-year-olds.
2. Medigap plans appeal to consumers who want
flexibility.
Agents and brokers already know that, but Deft
has the numbers to support producers’ gut knowledge.
Deft found that Medicare Advantage plans seem
to be attracting a bigger share of plan switchers.
Between 2015 and 2016, the likelihood that a
consumer would switch from a Medigap plan to a Medicare Advantage plan grew, to
7%, from 3%
The likelihood that a consumer would switch
from a Medicare Advantage plan to a Medigap plan shrank, to 4%, from 9%.
But the survey results also show that
consumers who prefer Medigap plans want to be able to choose their providers,
Dippel said.
Survey participants nearing age 65 who said
they preferred Medigap coverage ranked “want to be able to use any doctor or
hospital” as their top reason for preferring Medigap coverage. The percentage
of likely Medigap purchasers citing that as a top reason increased to 56% in
2017, from 49% in 2016.
Wanting coverage that would pay all medical
bills ranked a distant second. In 2017, just 37% of the likely Medigap
purchasers cited that as a top reason to prefer Medigap coverage.
Using Medigap plans is all about “no network,
no network, no network,” Dippel said during the webinar. “Network fatigue is
driving consumers to Med supp.”
3. Live humans are good for Medicare plan
sales.
Ten years ago, some insurance distribution
watchers speculated that selling health insurance online would be much easier
than selling life insurance online, because consumer demand for health
insurance is much stronger than consumer demand for life insurance.
In the real world, Connecture found, just 1%
of the consumers who come in through a web campaign end up signing up for
coverage. Only 5% of the consumers who reached its systems through ordinary web
searches converted.
For consumers who came in after getting a
personalized quick quote from a broker, the conversion rate was 19%.
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