Restructuring Your AEP Marketing for Success

Connecture, in partnership with Deft Research, conducted a webinar last week that took a deep dive into Medicare AEP in order to understand how shopping and switching behaviors are changing among Age-Ins and how payers can most effectively adapt in order to improve new member acquisition. Leveraging national data from Deft Research’s  2017 and soon to be released, 2018 Age-In report, seven direct takeaways emerged that health plans can apply to improve their AEP marketing efforts this year.

Shopping Increasing – Switching Declining:

In 2017, 50% of seniors eligible for Medicare did not shop around, but 40% did – a large jump in comparison to prior years. Of the four out of ten that shopped, only 9% switched – 40% fewer than prior years. For example, in 2015, one fourth of MA members switched. Since then, switching numbers have consistently declined, and data indicates that this trend is going to continue, leaving less prospects on the table for MA marketers who need to meet acquisition benchmarks. This decline is not simply because seniors are resistant to invest the time in research. Less Medicare beneficiaries are switching because there are more four star plans on the market due to stability in CMS reimbursement. Plan design and premiums aren’t really changing and quality is generally equal across the board. Without any defining competitors, Medicare members have no compelling reason to switch.

MedSup Members Moving to MA:

Out of the small percentage of Age-Ins who are shopping and switching, the majority are still switching from MA to MA or MedSup to MedSup. However, the amount of seniors switching from MedSup to MA is doubling year over year, indicating that conducting AEP marketing to MedSup beneficiaries can be successful. This marketing should clearly communicate the benefits of an MA in comparison to MedSup, including lower co-pays and co-shares, and the simplicity of medical and pharmacy being combined. The amount of Original Medicare members switching to MA is also steadily increasing, with all of this data supporting the overall growth in MA enrollment that is being seen.

Decisions Being Made in Advance of AEP:

Deft Research shows that at the start of the 2018 AEP season, 80% of Medicare beneficiaries planned to stay put and 96% did just that. Those most prone to switching already have it in their minds that they want to before the start of AEP. This is evidenced by the fact that nine out of ten of those who said they were thinking of switching at the start of AEP did indeed switch. What this means is that the decision is not being made during AEP – it’s being made during the other ten months of the year. Medicare marketers need to extend their AEP marketing activity throughout the entire course of the year, going beyond the tried and true Happy Birthday cards and creating year-round cross-channel direct mail campaigns that bring prospects to personalized online decision support tools and high-value content. Identify the 15% who are undecided at the start of AEP  and already in the mindset to switch, and you can win.

Target Age-In Demographics Changing:

Around the time of 2011,  the recession was deeply impacting employment and many seniors were forced to take early retirement. Today, half as many seniors are taking Social Security at age 62.  This is in part due to an improving economy and decreasing unemployment,  but is also due in large part to the fact that today’s Boomer is living longer and doesn’t have adequate savings. Boomers would rather take Social Security later to get the maximum payout. Only 20% of those 12 months away from age 65 are shopping around because they are retiring later in life. In 2017, of 1,040 seniors surveyed, over 25% said that they do not expect to receive Social Security until age 66 and just over half plan to enroll in a Medicare plan at initial eligibility. This is significantly changing the age of the target Age-In and as a result, the Age-In marketing approaches payers are applying. Those age 66 are no longer late to Medicare – they are either soon to be new enrollees or have not yet made up their minds on when they are going to enroll, making them viable prospects that should be included in marketing.

Retaining Existing Base Essential:

With the number of switchers dramatically diminishing year over year, payers must focus on converting the members they already have – those that are theirs to win in the first place and the easiest to gain. The most effective way payers can convert their existing Commercial base into Medicare customers is by ensuring they are delivering a personalized, seamless customer experience year round. But even more essential is consistently sending out direct mail and digital communications that make Commercial members aware of the Medicare plans their existing carrier offers. Deft Research indicates that half of seniors polled were uncertain as to whether their Commercial/Group plan even offers Medicare. This odd reality exists as a result of deep fragmentation within payer organizations.  Commercial marketing teams operate as completely separate entities from MA marketing, when they should be working in alignment. This deep silosm is resulting in members receiving communications that don’t leverage their existing member data and speak to them like strangers, as opposed to valued members. But how do you know if your existing members approaching Age-In are more prone to choose MA or MedSup? By looking at their data. People who choose MA do so because they want the simplicity of their medical and drug being combined and the lower co-pays for doctor visits. The primary reason people choose MedSup is for network flexibility – they can see any doctor or hospital they choose. Evaluating the number of out-of-network providers a member sees as well as their usage of medical and prescription benefits should tell you which plan to pitch.

Personalized Outreach Driving Conversion:

The most effective method for driving online conversion is personalized outreach from a broker (77%), particularly outreach that includes quick quotes, with this method driving 19% conversion. 62% is driven from a referral site, 46% via organic search, and 29% from a Web campaign. While leveraging a variety of digital marketing efforts is important, data clearly shows that the more personalized the digital broker/agent outreach, the more likely the individual  is to shop. Personalized decision tools also help to drive online enrollment, including tools that allow the consumer to calculate the cost of doctor visits and prescriptions. 76% of seniors are willing to supply data and take the time to fill out lengthy forms if they know they are going to get a personalized recommendation in return and seniors are four times more likely to select the best-fit plan if a decision support tool is provided.

Online & Mobile Shopping Activity Growing:

53% of those age  60-64 have shopped online for health insurance and 37% are comfortable enrolling online with little assistance. While direct mail has long been the gold standard of AEP marketing and still stands strong, online activity is growing throughout AEP, and direct mail is now being used as a driver to personalized online experiences as opposed to a plan awareness piece. More consumers are coming in via mobile as well – 18.2% in AEP 2018 and 14.2% via tablet. Payers are not just getting more online traffic though – they’re getting better traffic. Bounce rates are decreasing and conversion rates on smartphones are increasing. From a behavioral perspective, there are several different kinds of online Medicare insurance shoppers payers should be aware of. According to Deft, 18% are the “resistors” – the consumers who don’t want to look at many options and invest much time into the process, who are difficult to reach in most channels and often resort to agents. 42% are the “browsers” – those that are willing to shop online, but only for a 30 minute time span and only if personalized, quick information is provided along the way. This segment is the most likely to enroll, and thus the segment payers should look to target by tracking and analyzing their website behavior via Google Analytics. Then, there are the “researchers” (18%) – those that spend one to four hours shopping online, returning back many times in order to get the right answer, and are the most digitally experienced shoppers . Last but not least is the most difficult group of all, the “maximizers” (22%), this group is committed to researching and evaluating as long as it takes, they are tied to specific doctors and Rx’s, and are often paralyzed by analysis.

Payers looking to capture the opportunity of growing MA enrollment should adopt more consumer-centric marketing models, including integrating online decision supports tools, digitally enabling brokers to push out personalized communications on-demand, and tearing down departmental silos to forge conversion marketing plans that leverage member data in highly creative, personalized ways. Show the member you know and understand them – and you can win their business for life. Need help translating these insights into real-world executions? Cierant can help. Overseeing the personalization, production, and distribution of AEP acquisition marketing for America’s leading health plans, we offer both the industry expertise and end-to-end services you need to optimize your cross-media marketing across all facets. Call 203-731-3540 or email to request information on our AEP acquisition marketing services.


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