With Switching Down, MAOs Seek ‘Untapped’ Markets
Recent data from the 2021 Medicare Annual Election Period (AEP) reflects the anticipated increase in Medicare Advantage enrollment, which is up almost 10% from a year ago (see infographic, below) and indicates penetration exceeding 43%, according to industry estimates. But multiple factors are making it harder for MA organizations to attract new members, and while plans are enhancing their benefit offerings to stay competitive, they must do so in a way that aligns with their star ratings and other financial goals.
AIS Health spoke with GHG Vice President John Selby, whose long career in the insurance industry includes 10 years in various roles at Horizon Blue Cross Blue Shield of New Jersey. In his new role at the Convey company formerly known as Gorman Health Group, he is responsible for developing and executing growth strategies for GHG and its clients.
Editor’s Note: The following interview has been edited for length and clarity.
AIS Health: According to the latest Medicare Shopping and Switching Study from Deft Research, switching among MA members during the recent AEP fell 21% from the prior-year period and overall switching was down 18%. Do you think insurers should take this with a grain of salt given the disruptions of 2020, or is this indicative of a larger trend?
John Selby: I don’t think it was a surprise that we saw less switching, but I don’t believe that this was entirely an anomaly created by COVID. There’s been a trend toward stabilization over the last few years, particularly as more plans become 4 star [and] as the plans are becoming more stable, experiencing fewer rollercoaster rides — whether it’s related to premiums or benefits. So I think this is a trend that we’ve been seeing and with the plans that we’re working with, as we’re trying to help them find ways to become even more stable, and really it’s driving retention.
If you look at an area like supplemental benefits, that’s just creating more stickiness. I think that is a really good example of an area that could continue to move the needle in this direction going forward. The challenge that comes during AEP is members are more satisfied with the plans that they’re in, and that’s an area where it gets more challenging for folks on the carrier side to try and find new ways to market not just during AEP, which is becoming increasingly expensive. Obviously, the turning 65, new-to-Medicare market is critical, but then what other market segments do you start to parse out outside of or even within AEP that are maybe a little bit more untapped?
AIS Health: What do you think accounts for the people who did choose to switch plans?
Selby: One would be network: The first question people ask is, is my doctor in the network? The second might be mobility: Folks that are in an HMO are maybe looking to go into a PPO and have a little bit more mobility there. And then the third would be — assuming that there aren’t many major changes in the medical benefits — year-over-year, formulary-driven changes.
AIS Health: You mentioned supplemental benefits and how those are leading to some of consumers’ stickiness. Some insurers have expressed concern about being able to sustain these offerings. Is this something you’re hearing from clients, and what are you advising them?
Selby: What we hear from brokers and agents is how critical supplemental benefits are becoming, and have become, really, so that’s part of the validation. There are a lot of tenets to what you do around plan design. You’re trying to improve quality, you’re trying to improve the member’s experience, you’re trying to provide relevant services to them; and I think that’s where we see some of the creativity around supplemental benefits. But at the end of the day, if you don’t have the revenue you can’t sustain the benefit offering and so stars and risk adjustment are critical, in my mind, to being able to build a strong revenue base and sustain a strong revenue base.
I used the term before about the rollercoaster — that’s what you have to avoid. If your benefits, and premiums especially, are volatile and are not fairly consistent year over year, members are going to lose trust or faith, brokers are going to lost trust or faith, and it becomes an uphill battle. The supplemental benefits are sort of the biproduct of having a strong infrastructure in place that’s keeping your revenue consistent.