Resnick Unplugged

Medicare's Open Enrollment Big Question: What's In It For Me?

Medicare Open Enrollment’s Big Question: What’s In It For Me?

 
Medicare open enrollment is upon us. Whether first-time buyers or switchers from one plan to another, seniors will be shopping. From regional health plans to national mega-players, competition has never been greater—over 650 plan sponsors competing for enrollments. And, the range of benefit plan options is equally as robust:

•  Medicare Supplement (Medigap)
• Medicare Advantage (MA and MA-PD)
• Prescription Drug Plans (PDP)
• Private Fee For Service (PFFS)
• Medicare Preferred Provider Plans (MPPO)
• Medicare Savings Accounts (MSA)
• Special Needs Plans (SNP)

In a marketplace characterized by intense competition and a wide range of product/price options, it is critical to embrace basic tenets of senior selling. It’s time to sharpen your approach to Medicare marketing by finding a balance between education and selling.

Communicating with Medicare prospects about product features, benefit structure and premiums is crucial. Setting expectations about a Medicare plan’s value and anticipating questions in advance will go a long way toward creating informed, comfortable consumers.

The proper balance between education and selling can help shape a successful Medicare marketing strategy.

Education: Focus on plan features and benefits along with all the rules that go with it; but keep it simple. Medicare collateral or Web content needs to be easy-to-read and informative. Consumer education creates an understanding of a plan’s structure and how it works—basics such as deductible, copays and coinsurance; and complicating features like formularies, plan gaps and benefit extras. And, don’t forget to explain key administrative components such as billing and customer service. It’s a tough balance to achieve—not providing enough information could mean no decision; too much information could result in overload and decision shut down.

Selling: This is where a Medicare plan’s value proposition is communicated and sold. It’s your company’s “why us” and needs to comes through loud and clear—all within a framework of the benefit design you want to promote. Marketing communications need to be persuasive as well as actionable, always driving a prospect into the sales cycle. Most importantly is your ability to answer the big consumer question–what’s in it for me? This may include a range of value-based factors such as premium savings, enhanced benefits, greater freedom of provider choice, comprehensive drug formulary and, your company’s brand value.

Like all direct-to-consumer marketing success, yours will come from connecting with your senior customers logically and emotionally. Integrate senior demographics and psychographics into a marketing and sales strategy. It allows you to understand what’s important to them, what concerns them, and what they want from their health insurance. Market intelligence also helps to know where to find them and how to get their attention (what they read, watch and listen to; what motivates them to respond). Develop customer profiles and use these to target product offerings and match marketing messages. Seniors are not a one size fits all market segment.

Finally, deploying a few indispensable senior communication principles will go a long way toward improving Medicare plan sales. Throw away the jargon and industry acronyms. Use practical explanations, pictures and larger typeface to assure usability and readability…not to mention clickability given rapid adoption of the Internet by seniors. Provide plenty of opportunities to compare plans and display additional sources of information. If its fine print – call it fine print; if there’s a benefit gap, identify it, don’t hide it. Let customers know what’s covered and what’s not. Finally, before you go public, give your communications a test—share your sales presentation, collateral or enrollment materials with seniors, your ultimate buying audience!

Medicare, like most insurance products can be intimidating, frustrating and bureaucratic. There are complex benefits, tricky rules and a lot of options to choose among. Given open enrollment’s condensed timeframe, there’s bound to be confusion. Medicare marketing success hinges on educating seniors, defining value and creating motivated buyers. This is a customer segment that wants to understand, upfront, what they are purchasing, how benefits work, and how your plan fits into their financial and lifestyle situation. And, don’t forget to answer seniors’ number one question—what’s in it for me?

Health Squeeze

Health Squeeze™ – What’s a boomer to do?

 

Seventy-eight million baby boomers are expected to live longer than any generation this country has ever seen. Every day 8,000 turn 60 years old.

Boomers are educated, tech savvy and convenience driven. They control more than $8.5 trillion in investable assets. And as consumers, they’re smart cynics. Health is their most important asset, with financial security a close second. Boomers retiring at 65 need enough money and protection to support themselves for 20-25 years (upwards of $2 million).

Today, boomers are facing tough health care decisions. And, it’s going to get a lot more complex…quickly.

Health insurance benefits are changing as well as the “where, when and how” medical care is delivered. A quick scan of personal health care and financial choices boomers are facing is leaving a big unanswered question – what do I do?

It’s a health squeeze.

Consider the array of decisions boomers are facing:

Concierge Medicine – Your primary care physician sent you a letter asking for a $2000 per patient annual practice “membership fee” and, it will be your responsibility to deal with your insurance company going forward. Otherwise you’ll have to find a new doctor.

Medical Tourism – You need a hip replacement but between gaps in coverage, high deductibles and coinsurance you can’t afford it in the U.S. An overseas provider has been suggested…in India (it’s one quarter the cost).

Health Insurance –

•  You’ve taken early retirement. COBRA is expensive and only lasts 18-months; it will be six years before you’re eligible for Medicare.
• Your recent college graduate no longer is eligible under your group health policy. Between job searches and waiting periods she’s not likely to have employer coverage for 3 to 6 months.
• Your divorce is final next month and your spouse gets custody of the family health insurance.
• Your employer has announced a new set of health plans for the next open enrollment. Instead of a $500 deductible you’re moving to a Consumer Directed Health Plan with a $3500 deductible with an account-based arrangement, an HSA or HRA (you already have an IRA and FSA). And, you have Web-based tools to evaluate doctor and hospital prices and quality of services before receiving care.
• Your sixty-fifth birthday is a few months away and you’ve already received more than 25 solicitations for Medicare plans you’ve never heard of – MA, MA-PD, PFFS, Medigap, PDP – some even say they are “zero premium.”

Lifestyle & Wellness – You’re a little overweight, sneak a few cigarettes, don’t have a regular exercise regime and you keep telling yourself that last cholesterol test was borderline. Now, your employer is requiring all employees to take a Health Risk Assessment as part of a new healthy rewards program that provides incentives for good health habits and, penalties if your next assessment isn’t improved.

Hospice Care – A close relative has a terminal diagnosis. It’s agreed that final months at home, surrounded by family is the preferred “end-of-life” course of action. The choices – budgetary, logistical, and quality of care – are mind-boggling.

Home Health – Your dad has early onset Alzheimer’s and is juggling 12 prescriptions. He needs a 24-hour caregiver and you live across the country. Friends and family are sharing horror stories of incompetence and unreliability, even petty theft. Now you must select the “right” caregiver and, figure out how to mange long distance.

Retail Clinics – Your teenager needs a sports physical; you just turned 55 and haven’t had a bone density test, and; your mother-in-law needs your help checking her diabetes. It’s a month to get an appointment at your doctor’s office and the $130 office visit charge comes out of your pocket. A new clinic recently opened-up inside your local pharmacy where all visits are $49.

Long Term Care – Everyone around you is talking about retirement planning. Long term care insurance comes-up in every conversation. But, there are as many questions as answers – in twenty-five years when you may need LTC will the company still be around? Will benefits keep-up with rising costs? Are you better off setting-up your own savings plan?

Pharmaceuticals – You have a couple of prescriptions today to deal with restless leg syndrome, trouble falling asleep, moodiness, cholesterol, or maybe you’ve succumbed to all those email solicitations and are giving an ED “lifestyle enhancer” a shot (even if the risk is an erection lasting over four hours). But what about tomorrow. There are over 240 new drugs being studied for Alzheimer’s, Parkinson’s, diabetes and depression. There are another 450 in R&D for cancer, heart disease and stroke. Cosmecueticals and nutraceuticals are becoming popular. A lot of choices lie ahead.

The complexity is endless, and answers won’t come easy. Clearly, the Web is positioned as an important source of answers – 160 million Americans use the Web for medical information. Some people are already being labeled Cyberchondriacs. New websites are popping-up every day claiming to be “THE” resource you need. Some are populated with well-sourced, expert clinical content. Others are vehicles promoting a particular a product or service (e.g., drug, insurance, medical device), relying on Web advertising or membership fees for revenue. And, many others are rooted in a particular clinical specialty or positioned as tools to navigate the health care system.

Another rapidly emerging Web-based resource are health care social networks—online communities of people who share interests in a specific health condition or concern such as disease treatment options, rating physicians and insurers, alternative therapies or quality outcomes measures.

Is the Web the only answer? Independent consumer information gathering is important, as are support tools that help answer important medical, financial and social questions. But given the life-changing weight of many of the decisions that lie ahead, people will need real-time help from real people with real knowledge.

A health squeeze is upon us and it promises to get tighter and tighter.

© 2008 Lindsay Resnick

Health Insurance Buzz '07

Health Insurance Buzz ‘07

What’s going to drive change in 2007? How are health plans positioning for the future? Here’s a look at the trends shaping health insurance this coming year.

Technology From cybercondriacs to genomics, healthcare technology will be a huge force. With over 120 million people online searching for health information, the customer has embraced technology! For health plans, integrated benefit card technology promises a new era of administrative efficiency.

Differentiation Health insurance products have become indistinguishable. Going head-to-head with competitors means rising above this “sea of sameness”. Differentiation will come from unique brand positioning that connects with customers and has competitive muscle.

Boomers America’s 78 million baby boomers are expected to live longer than any generation this country has ever seen. They are educated, tech savvy and convenience driven. From empty nesters to Medicare, boomers are a growing opportunity for health insurers.

Consumerism “Proof-of-concept” will take center stage in 2007 as health plans justify Consumer Driven Healthcare investments. Employers are expecting premium savings and at the same time employees are suffering deductible shock and benefit intimidation.

Distribution Detailed customer profiles, psych-demographic data and predictive modeling are making multiple sales channels a competitive necessity. The result is improved product awareness and a one-on-one customer relationship that turns into sales growth.

Lifestyle Half of Americans now believe it is fair for people with unhealthy lifestyles to pay higher insurance premiums, deductibles and co-pays. New and innovative lifestyle management programs are embracing wellness and prevention and rewarding members to get healthy.

Individuals As employer-based health insurance shrinks and the uninsured population grows, the individual health insurance market is booming. Products need to be tailored to unique purchaser needs, striking the right balance between benefits, affordability and insurability.

Convergence Health insurers own banks and banks have healthcare business units. Financial planners are integrating benefits into long-term asset protection, and health brokers are weighing tax implications of HSAs. Today’s healthcare consumers are tomorrow’s payers.

Communication Customers are demanding information in user-friendly, readily accessible formats. Communications need to reflect demographic segmentation. It will take a new mix of strategies to ensure that companies are reaching their target customer.

Healthcare Concierge medicine, hospitalists, retail clinics and medical tourism are changing health care delivery. Spending on prescription drugs will surge and employers will continue to cut back on sponsoring health benefits.

This coming year promises to be challenging. Smart health plan executives will set themselves up to anticipate market change, refine strategic vision and capture new market opportunities.

NOTE: For a complete copy of the recently released Executive Briefing—“Top Ten Trends Shaping Health Insurance in 2007,” please email your request to lresnick@finelight.com.

© Lindsay Resnick

Healthcare

Consumer Directed...or Consumer Dejected

In today’s healthcare marketplace, consumerism is a dominant force. America is witnessing the emergence of a generation of price sensitive healthcare buyers. Cost shifting by employers has led to higher deductibles and increased out-of-pocket expenses for employees. Plan designs are exposing consumers to price and quality differences among providers. The result is a healthcare consumer equipped with information, empowered with choice and motivated by accountability.

Consumer Directed Healthcare (CDH) promotes increased awareness and consciousness about choice, cost and quality of care. Rather than shielding consumers from the actual costs of healthcare services, these plans involve consumers directly. The customer takes the lead in deciding where, when, and from whom they receive care. CDH has arrived, nationally and locally.

Over the years managed care helped stem the increase in healthcare costs. But dependence on rules-based cost controls is no longer effective. Nagging double-digit premium increases demand a new approach. And, with most HMO and PPO plan designs problems are exacerbated by dependence on a payment system grounded in co-pays that isolate consumers from the actual cost of care. Low co-payments for office visits, tests and medical procedures have given people a false impression of how much healthcare really costs.

Health insurance customers are clamoring for more choice, lower rates and less intervention in personal healthcare decisions. Employers are looking for health insurance options that deliver quality care to their employees while reducing premium inflation. The result is healthcare consumerism — benefit plans and support tools that put consumers and their physician at the hub of healthcare decision-making, giving them greater discretion and control over their benefit dollars and medical care choices.

Consumer Directed Healthcare plans introduce incentives to increase member involvement in the healthcare decision-making process. Plans meld prevention, wellness and major medical coverage with a savings or spending account feature while providing access to negotiated rates from physicians, hospitals and other providers.

It appears CDH has reached the tipping point as the future direction of employer-sponsored health insurance. Three persuasive business drivers are fueling its growth:

1. Alternative to managed care
2. Return control and choice to the customer and their providers
3. Employer premium stability and price predictability

Patients are the new healthcare consumer. They want to know what they are buying and why it costs what it does. Every healthcare company reaching-out to today’s consumer has to communicate value – including quality measures – in meaningful terms. In the end, don’t underestimate a patient’s willingness to comparison shop when it means saving money out of their pocketbook.

NOTE For more information see the article CDH Success: What's it going to take?

© Lindsay Resnick