How to help aging-in group members find the retirement coverage they need

Health plans have struggled to transition their aging-in commercial members to Medicare Advantage. The current conversion rate hovers between 15% to 35%, so even a small increase in the current conversion rate can provide a significant lift in overall Medicare Advantage revenue. For a large health plan with approximately 10 million members, with 2% retiring every year, at $10,000 average revenue per member per year, a 1% lift in conversion could unlock annual revenue of $20 million.

However, many health plans lack the necessary integrated strategy, analytics and operating model to enable this conversion. With appropriate interventions, health plans can transition aging-in members to a Medicare Advantage plan and retain their business.

To delve deeper into this potential opportunity, ZS launched an in-depth qualitative research with group members nearing retirement age, sales leaders and broker agents dealing with commercial group and Medicare Advantage plans. Our research identified several external and organizational challenges that contribute to low conversion rates.

Customer-related challenges

• Fewer than one-third of commercial members are aware of their carrier’s Medicare Advantage offerings.
• Many aging-in commercial members who want to continue with their current provider(s) are confused about provider networks when switching to a Medicare Advantage plan. This concern leads to increased member attrition.
• Dissatisfaction with their current employer group plan may influence an aging-in member’s choice of Medicare Advantage plans.

Technology challenges

• Challenges around data integration and adoption of sophisticated analytics leading to sub-optimal member targeting.

Organizational challenges

• A lack of collaboration across the group and Medicare Advantage business units prevents lead- and data-sharing across the organization.
• Many health plans have transactional relationships with agents. Health plans rarely work with the same consultants across employer group and Medicare Advantage business units.
• Commercial group sales reps aren’t incentivized to improve conversion of their retirement-age members to Medicare Advantage.

1. Know your employer group plan members better

As members approach retirement, they’re often overwhelmed by the decisions they need to make at this stage in their lives. While some employed age-ins are well informed and are confident about finding the appropriate insurance plans, many are anxious and need support in choosing the right plan. Armed with a rich understanding of their customer personas, health plans can identify member concerns and appropriately address them in their marketing efforts and communications.

2. Improve member targeting using advanced analytics

While data sources such as customer profile information, plan coverage, consumer behavior, claims history, clinical history, channel affinity and perceptions are available, many health plans do not leverage them to refine member segments and targeting. Even health plans with access to all the requisite data sources perform poorly with data sharing and integration.  

Let’s consider Jane. Jane is 64 years old and is currently employed. With one year until she plans to retire, Jane is exploring Medicare Advantage plans and is overwhelmed by the decision-making process. She has a chronic condition and prefers to continue with her existing specialists. She also prefers 1:1 conversation to build trust. She is conscious about out-of-pocket costs and wants to quickly choose a new plan with nice-to-have features.

A robust data strategy will enable integration and availability of this information with Medicare. Advantage sales reps. Analytics-guided targeting algorithms will place Jane in the right customer segment and suggest the next-best-action:

• The right channel to send the initial marketing communication: Phone call
• The right channel for the follow-up conversation: 1:1 meeting
• Plan suggestion: Provider network with existing specialists
• The right add-on features: Gym membership
  
  Note: The data strategy and analytics solution should reflect access restrictions and marketing guidelines to generate orchestrated suggestions that can aid member outreach.

Lastly, health plans must assess their current organizational levers that are critical to enabling transition of existing group members to Medicare Advantage.

• Set the tone at the top. The CEO/leadership team needs to underscore the importance of retirement-age member conversions to Medicare Advantage.
• Sales executives need to have clear targets and incentives. Drive conversions by setting clear goals and incentivizing sales reps.
• Promote collaboration between the groups through a concerted organizational change management. While the need for collaboration between employer group and Medicare Advantage sales organizations is fairly obvious, multiple other functions such as information technology, marketing and operations also need to work together. A technological intervention in and of itself seldom drives the required results. Firms need to have a robust organizational change management initiative to ensure seamless collaboration between the groups.
• Define and track key performance indicators (KPI). Health plans should define KPIs and track them to sustain conversion efforts. Some useful KPIs to track include: rep-level conversion rates, client organization level conversion rates, member experience (current) and engagement initiative results.
• Continually identify best practices and implement innovation(s) at scale. Many firms may need to pilot multiple strategies that will increase conversions. Once the successful ones are identified, a clear execution strategy is needed to scale these innovations.

The opportunity to capture wallet-share from a health plan’s existing customers and make them customers for the rest of their lives is real. Many health plans also have most of the building blocks.

What’s needed is an integrated strategy. Bringing the right organizational and technological building blocks to bear will enable health plans to realize the opportunity and create a sustainable competitive advantage.