During last year’s Annual Election Period, the Medicare marketplace felt the impact of the COVID pandemic and the presidential election. The anticipation of navigating new benefits amid the fear of contracting the virus drove many seniors to keep their current coverage rather than switch plans. Outside of switchers, the new-to-Medicare market, formerly referred to as “age-ins” and now evolved to include the expanding post-65 retiree audience, was a roller coaster of activity. Many in this segment of eligibles were forced to retire earlier than planned, while others put off retirement after taking a hit to their 401Ks and savings. But enough about the past. As we welcome the 2022 Annual Enrollment Period (AEP22), we can expect shopping activity that reflects the latent effects of last year’s crisis, as well as forward-thinking efforts to refresh shopper experience and reinvigorate switching.
Look for Increased Switching
In a few short days, the Medicare market will come alive for AEP22, marking the dawn of a new day. Ok, maybe that’s slightly dramatic, but we can safely predict that while last year’s fears drove resistance to switch plans or carriers, this year’s vaccinated seniors may want to revisit their options. The result: shoppers will abound and the percent of the market that will switch plans will likely increase.
One of the sources of a potentially active market is 2020-2021 retirees who selected quickly and may now have time to consider all their options. Think of it this way:
- COVID forced some to retire, which likely added to the volume of people who selected coverage at age 65.
- Those in their first few years of Medicare coverage are more likely to switch plans than those with more longevity.
We can expect a more active shopping and switching market with the combined volume of first-timers with the higher likelihood of switching. Another shopping driver is satisfaction, or lack thereof. Those who were diagnosed with COVID or suspected they had it were more likely to switch health insurance in 2021, according to Deft Research. These shoppers’ 2022 decision to keep their current coverage or switch will likely be hinged on their experience in 2021. The experience of members who had higher utilization of their benefits or who may have had care interruptions from the pandemic may be questioning the quality of their plan and considering changes.
Expect More Bright Shiny Objects
It is no secret that Medicare insurance options have become more and more commoditized over the years. In the mix of benefits, $0 is still hero, with many carriers offering $0 premiums, copays, deductibles, and generic drugs. Add messaging about being “one of the largest networks of doctors and hospitals” and highlight dental, vision, and/or hearing benefits, and you will be hard pressed to name the exact carrier promoting them; they all are. But every year, there seems to be a new bright shiny object in the form of supplemental benefits. While many plans have similar options like transportation, over-the-counter (OTC) allowances, and others, the winners are able to overcome two primary challenges: awareness and creative packaging.
It is a common reality that members don’t know their benefits in any detail or depth. This only happens when they use them. Supplemental benefits that go unutilized can be easily forgotten; that is until shoppers see them offered by another carrier. Driving awareness of the unique plan value available through supplemental benefits will get the attention of current and potential new members.
Creative packaging of supplemental benefits will make these objects even brighter. Bundling like benefits, even to give clarity in marketing messages, brings their value to life.
Acquisition and Retention is All About Experience
Creating stellar customer experiences is key to achieving acquisition and retention goals. Forbes cites that 86% of customers are willing to pay more for great customer experience. Personalization in messaging, hyper-targeting at a segment level, and channel selection that aligns with where potential members are – young and old – are all becoming table stakes to gain share.
Making things easy and hassle-free attracts attention. No one wants shopping for health insurance to take a long time or be cumbersome. Attention spans are short, and patience is thin. The AEP22 marketplace will be full of messages about simplicity, flexibility, and brand value.
Plans that captured their fair share of these age-ins throughout the year can leverage these same experience elements to retain them during Annual Enrollment. As mentioned earlier, 65-69 year-olds are more likely to switch than their older counterparts, perhaps because they’re still learning and deciding which plan is right for them. Building share and lifetime value cannot be accomplished with a leaky member bucket.
Look outside health insurance, and the leading companies in all industries are winning through exceptional customer experiences. Customers are always looking for products and services that make their lives easier. The winning brands are those who step up to the plate and deliver on experience.