You Should Know...
Why Beneficiaries Choose You
The Kaiser Family Foundation recently released a “Data Spotlight” regarding Medicare Advantage enrollment trends across the country as of March 2017. Some of the trends are no surprise but one, deeply buried, is.
Penetration of the program continues to outpace overall Medicare eligibility with a flat third of Medicare beneficiaries enrolled in a Medicare Advantage plan—a proportion expected to increase to 41% by 2027.
Most of the growth is coming from group plans as organizations recognize the program as the best opportunity to offload the risk associated with their retiree health benefits.
Out-of-pocket costs for both healthcare and pharmacy benefits may be staying stable, but the rising overall cost of care is putting more pressure on insurers and organizations to generate greater revenue through risk-score capture and “quality” bonuses.
Of greatest surprise, though, is the finding that beneficiary enrollment in plans with high star ratings have been flat for the past several years. Pushed primarily as a means for patients to identify the “best” plans, it was expected that the plans with the highest star ratings would see the greatest growth in covered lives, especially since five star plans can enroll anyone at any time.
Rather, marketing research now confirms that beneficiaries don’t use star ratings to decide on which plans to sign up for. They focus, instead, on benefit structure, out-of-pocket costs and provider networks. This suggests that the way forward for insurers and organizations to grow their products and revenues is to concentrate on these factors to promote beneficiary recruitment, especially given the ephemeral nature of “quality” programs and the tendency of those programs to be “adjusted” into irrelevance over time.
If you want to grow your product, make sure your benefit design is competitive and your provider network is strong—that’s what your potential customers are looking for. Covered lives, not transient “quality” programs, are the true coin of the realm.