Five Pain Points Health Plans Face in
Attracting and Retaining Members
JANUARY 13, 2020
From the concept’s first introduction in the
1970s, the private coverage version of Medicare, Medicare Advantage, has
continually evolved in response to demographic, political, and market forces.
Today, payers offering Medicare Advantage plans face a variety of new
challenges, and that’s without considering the potential disruptions to the
market from the 2020 election or legal challenges to the Affordable Care Act
(ACA).
Many of these pain points in the healthcare
industry are a result of the ‘good problem’ of Medicare Advantage plan success.
As the market has grown in sync with the “silver tsunami” of Baby Boomers aging
into Medicare eligibility, so too have the challenges healthcare plans face in
attracting, educating, and retaining members.
This dynamic has recently been compounded by
the reintroduction of what is now called the Medicare Advantage Open Enrollment
Period (OEP).
The blog Boomerbenefits.com explains,
“This Medicare Advantage Open Enrollment Period is not new. It used to be a
regular part of each Medicare year before the ACA legislation discontinued it.
It allows individuals enrolled in a Medicare Advantage plan to make a one-time
change early in the year.”
While the original OEP only allowed members to
disenroll and return to original Medicare, the new OEP reintroduced in 2019
allows enrollees to change from one Medicare Advantage plan to another. This is
in addition to the existing period during which such changes can be made: the
Annual Enrollment Period (AEP).
With this change, the era of the switch has
ramped up. Healthcare plans are facing the following five pain points in
attracting and retaining members at a time when the hurdles to plan switching
are lowered.
Pain Point #1:
Increased Plan Competition
The confluence of the demographic wave of
aging Americans and the market opportunity made possible by regulatory easing
on Medicare policy has led to a boom in Medicare Advantage plans. An analysis
from Accenture found that “more
than 40 percent of health insurance M&A deals in 2017 involved Medicare
Advantage expansion.” The Kaiser Family Foundation found that
2019 offered more plans than in any year since 2009:
Health insurance market analyst firm, Mark Farrah, says, “a
total of 4,407 distinct Medicare Advantage (MA) plan offerings are in the
market lineup for the 2020 AEP….” This reflects a sizeable increase from 3,084
in 2019.
CNBC reports, “For
Medicare beneficiaries, the expansion amounts to a 32% increase in the number
of Medicare Advantage plan choices compared to last year — in some markets that
means 20 options or more.”
They attribute this expansion, in part, to a
Trump Administration policy change that gives insurers greater flexibility to
include additional benefits that go beyond add-ons like dental and vision
plans.
This heightened competition isn’t just
apparent in the number of available plans to choose from. It is also reflected
in the information overload potential enrollees face during the enrollment
periods. As healthcare industry marketing firm Medialogic points out,
“One of the biggest challenges faced by
healthcare marketers during the Medicare Annual Enrollment Period (AEP) is that
it only lasts 53 days. During this compressed time, Medicare Advantage plans of
all sizes from regional health plans to national players are elbowing one
another out of the way as they jockey for positioning in front of
Medicare-eligible prospects.”
With higher awareness among members that they
have the option to switch plans, and multiple plans to choose from, it’s no
surprise that plan switching is another of the pain points in the healthcare
industry.
Pain Point #2: Lower
Barriers to Plan Switching
Plan switching in of itself isn’t new. Accenture research indicates that
“13 percent of existing Medicare beneficiaries leave their current plans each
year, with 10 percent voluntarily switching and 7 percent switching carriers.”
As switching becomes more common, health plans
that previously focused solely on attracting those aging into Medicare each
year need to look beyond age-ins to engage and attract switchers.
Accenture estimates that Medicare switchers
"represent 4.3 million (64 percent) of the ~6.7 million members up for
grabs each year for health plans.” That makes switchers a comparable segment to
the roughly four million baby boomers who age into the market annually.
What is new is enrollees’ interest in
exploring a switch. Accenture predicts the
rate of switching will likely continue to increase in the coming years due to
three primary factors:
Even when they don’t switch, enrollees are
exploring their options. Accenture found that
42 percent of Medicare beneficiaries like to shop for coverage, even if they
don’t switch to another plan. This is likely due to a characteristic of the
incoming Medicare population: they are savvy shoppers.
Pain Point #3: Bargain
and Value Hunters
As we discussed in our paper, Baby Boomers Drive Health Plan
Innovation, the Baby Boomer cohort is not a monolith. The population
now aging into Medicare is what is known as the “trailing edge:” those born between
1956 and 1964. This group features characteristics that make them more informed
and selective about coverage. According to Deloitte,
many trailing-edge Boomers:
·
Are used to having
several plan options to choose from through their experience with employer
coverage;
·
Are more familiar with
the concepts of plan networks and benefit designs (e.g., health maintenance
organizations, preferred provider organizations) than their predecessors.
Because of this, many are comfortable with comparing different plan options;
·
Have enrolled in
employer-based plans for years (if not decades) with the same health plans that
offer MA plans, making them more likely to seek out MA products from the health
plan they already know;
·
Use technology to a
greater extent and engage with health plans differently than the leading-edge
population.
Another unique feature of this cohort: it
includes more women who have been in the workforce and who have made their own
decisions about health coverage vs. being covered via a spouse’s plan. Deloitte notes that
“Increased workforce participation in earlier years of life also means that
many women are eligible for Social Security and, thus, Medicare benefits,
through their own work history.”
A study published by Johns Hopkins University Press found that
“Women in the United States make approximately 80% of the health care decisions
for their families.”
Women’s’ direct workforce experience will make
them an even more powerful voice in vetting and selecting Medicare Advantage
plans; they are also likely to apply budget-consciousness to the decision.
Accenture found that
“Sixty-two percent of survey respondents who switched MA and MedSupp carriers
in the past year did so because they did not believe they were offered good
value for their money.”
Plan options were another key deciding factor.
Importantly, the customer experience issues
(member experience, ease of doing business, knowledgeable representatives, and
online services), when added together, come in third at 15%. In a competitive
market, plans can address one of these pain points in the healthcare industry
and make headway with one segment of “shoppers” by improving the customer
experience.
Overall, these pro-shopping characteristics
make the incoming, trailing-edge population unique in its priorities and needs.
As Deloitte notes, “These
differences will likely require health plans to develop strategies such as
engaging with new partners, developing new services and communication
strategies for members, and retooling materials and technologies to recruit and
retain future MA members.”
At the nexus of all the pain points already
discussed is enrollee and member communication.
Recruitment and member engagement needs to
begin earlier, be more targeted, relevant and personalized, and have the
flexibility to connect with a diverse audience in their preference of channel;
strategies health plans are currently struggling to achieve.
Pain Point #4: Poor
Member Engagement
In a Medicare Advantage Customer
Satisfaction Study, JD Power found that “Member satisfaction
with the information and communication from their Medicare Advantage plan has
declined significantly (-16 points) from last year and is now the
lowest-scoring factor in the overall health plan experience.” In many cases,
this dissatisfaction stems from a failure of member education.
Healthcare analytics company, SPH Analytics, finds that “A
surprising number of health plan members are not aware of the specific
benefits, features, and requirements of their plan.” Nevertheless, the answer
is not more of the same when it comes to the member communication and education
tools plans are currently using.
Communicating plan benefits in a way that is
accessible and easily understandable is a challenge for this industry. Visible Thread cautions,
“Communicating in plain language is one of the most critical ways to build
trust. But 86.6% of insurers are using complicated language, long sentences,
passive voice and complex word density to communicate with Medicare's
audience.”
While healthcare plans are rethinking how they
communicate plan benefits to better engage members, they should also consider
that the definition of engagement itself is shifting. Where engagement was once
primarily thought of as outgoing communication to the member, a population that
is more actively involved in managing their health and contributing
patient-generated health data (PGHD) is interested in a relationship with their
carrier that is more consistent, relevant, and designed to help them improve
their health.
Health insurance research firm, Deft, has developed the concept of
health plan “engage-ability, the characteristics that make a
member most likely to “both stay with their carrier, as well as recommend the
plan to their friends and family.”
Meeting members’ desire for a more
personalized relationship is key to addressing another of the pain points in
the healthcare industry: Treating chronic conditions.
Pain Point #5:
Expanded Benefits for Treating Chronic Conditions
The CDC estimates that 70 percent of all
Medicare beneficiaries have at least one chronic condition and the HealthMine 2018-2019 Medicare
Advantage Report survey of Medicare Advantage beneficiaries
found that, “Few think their plan knows them well, with spotty personal
communication about their chronic condition. The lack of perceived help in
managing a chronic condition could present a huge opportunity for plans based
on beneficiaries' needs and required CMS metrics and incentives.”
Healthcare plans are facing a new era in the
treatment of chronic conditions due to what some are calling a tectonic shift
in senior health care: the reinterpretation of allowed supplemental benefits by
the Centers for Medicare and Medicaid Services (CMS) to include services that
increase health and improve quality of life.
Blog Aging Options explains.
Beginning in 2019, Medicare Advantage plans, “which already lure seniors with
things traditional Medicare can’t cover, like eyeglasses, hearing aids and gym
memberships — [were] free to add a long list of new benefits.”
Examples of coverage additions include adult
day care programs, home health care aides to help with activities of daily
living like bathing and dressing, palliative care at home for some patients,
home safety devices and modifications like grab bars and wheelchair ramps, and
transportation to medical appointments.
As with any tectonic shift, the ground has yet
to settle in terms of how plans can incorporate these new benefits. Blog Healthpayer Intelligence
reports, “despite wider parameters for supplemental benefits, plans
have difficulty financing the changes. They are being asked to make new
benefits for Medicare beneficiaries without receiving new funds. For many, this
means reworking existing benefits to incorporate serious illness supplemental
benefits instead of creating new benefits.”
Researchers at the Urban Institute conducted a
series of interviews with Medicare Advantage insurers, health insurance
experts, and social services providers about these changes. One of the study’s
authors Lisa Skopec noted, “I think plans are interested and they want to be
able to offer additional benefits that can help enrollees. But progress has
been limited so far.”
Solving the riddle of how to incorporate—and
pay for—these new benefits will be a challenge for Medicare Advantage looking
for ways to attract new and switching enrollees. Making it clear up front which
benefits will be available, in approachable language and available via the
digital channels trailing-edge Boomers prefer, is an important first step for
healthcare plans in addressing the pain points in the healthcare industry.
No comments:
Post a Comment