The Medicare Advantage (MA) market has crossed 21 million beneficiaries. With growing popularity, it’s expected to move from 35% to 50% market share in the next 2-4 years. Health plans, hospital systems and disruptive start-ups continue to be attracted to this high-revenue, direct-to-consumer market segment. And, with a surge of new-to-Medicare Boomers aging into the marketplace every day, upwards of 10,000, one thing is for sure…it’s a fiercely competitive segment with no signs of slowing down any time soon.
About 58 million people were enrolled in Medicare at the end of last year and more than 75 million people are expected to be enrolled in the program by 2027. For consumers, there’s good news: on average a Medicare beneficiary has access to over 20 Medicare Advantage plans.
For MA plan sponsors, there’s good news too: a steady stream of prospective customers in a market where companies have a history of retaining their members, and for the foreseeable future, MA has a favorable political and payment outlook. Plus, Medicare Advantage continues to outpace the 14 million member Medicare Supplement market. But beware, MA competition is tough…the top eight Medicare Advantage plans have 75% market share.
How to stand out? Differentiating on core product or price isn’t easy, so expect add-on or supplemental benefits to get creative around healthy living, transportation, in-home services, telehealth, and others addressing components of social determinants of health.
Also, differentiating around customer service excellence will also gain traction in 2019. Making sure the MA customer journey is personalized will set winners apart from the pack. By leveraging data-driven insights to better understand MA beneficiaries, plans will tailor ‘know me and keep winning me’ experiences across the customer life cycle — from brand awareness to direct-to-consumer acquisition to customer activation to member retention. In 2019, we’ll see a new respect not only for customer satisfaction as part of Star Ratings, but as part of MA plans’ renewed focus on customer ‘lifetime value.’
Who’s the competition? Expect new market entrants and partnerships to reshape the MA landscape in 2019. Whether ‘disruptor’ insurance plans or hospitals taking full risk on an MA plan, the potential revenue is too enticing for these players to stay away. Many of the new start-ups are attracting significant venture funding. They’re also gaining attention for their ‘unique’ value proposition as ‘technology companies’ – FinTech or HealthTech. These innovators place more importance on engineers, designers and coders compared traditional health insurance functions. Starting with a clean slate, they are able to design internal processes and workflows around the customer. They also place a heavy emphasis on the personal nature of their customer relationship, CX simplicity, and the ‘patient–provider’ connection.
Lastly, add to the mix market ‘disintermediators’ partnering with MA plans such as national pharmacy chains, big box retailers or mega-primary care networks, and you’ll see markets shift and consumer loyalties challenged.
What’s next? Medicare Advantage will likely add another 5 million beneficiaries over the next 4-years. There are plenty of opportunities to grow in the MA marketplace. In addition to a booming age-in market, expensive Medicare Supplement options remain vulnerable to MA’s value proposition. But most of all sustainable growth takes a combination of well-honed preparation: tightly articulated brand narrative, data-based prospect targeting, robust direct-to-consumer marketing, multichannel selling, and a beneficiary experience built around convenience and simplicity. Medicare Advantage’s direct-to-consumer focus means being relevant. In other words addressing consumers’ long list of pain points: economic woes, too many choices, preexisting conditions, and the complexities of Medicare…admit it, on a good day Medicare can be a bureaucratic nightmare held together with red tape.