In addition to shopping for new plans during the traditional enrollment period (AEP) between October 15^th and Dec. 7^th, new rules have given consumers more time and options to change their Medicare Advantage plan if they are dissatisfied with their current one. CMS in 2019, reinstated OEP which allows members to switch from one MA plan to another or drop to traditional Medicare between January 1 and March 31 of each year.

With the 2020 OEP only a month away, insurers must understand the needs, expectations, and shopping behaviors of MA beneficiaries to better prioritize investments to minimize churn.

Analyses on MA plan enrollment during 2019 OEP and AEP showed that more than 20,000 MA consumers switched products during the lengthened shopping window—up from 15,000 during the shorter 2018 window. While large national plans continue to make year-over-year gains in market share, small regional and PSHPs retained more market share during the switching window.

Read below for 3 key insights on consumer behaviors during 2019 OEP that plans must consider as they chart out their retention strategy:

More members switched during the lengthened OEP, new members at highest risk for switching.

For coverage in 2019, more than 400 new options were available to more than 22 million MA consumers. On average, consumers could select from 24 different plan options.¹ In turn, more MA beneficiaries chose new plans during both traditional enrollment and more beneficiaries switched plans during the lengthened OEP window.²

Results show that in 2019, plans lost a median market share of 0.35% during AEP (representing approximately 300,000 members) and 0.04% market share during OEP (representing more than 20,000 OEP switchers). Enrollee switching increased both during AEP and OEP in 2019.

Median monthly change in market share¹ and enrollment declines during
2018 and 2019 OEP

With more plans to choose from, members were likely to choose new products during the traditional shopping period to begin with. It’s important to note that new plan members are most susceptible to confusion around benefits and coverage which increases their likelihood to switch. Separate Deft research has shown that it’s new plan members that were most likely to switch during OEP.³

Implications for plans

Member onboarding should be a priority for every plan as soon as the member chooses to enroll. Since the most switching happens during the month of January, onboarding must happen earlier and more effectively than ever before. Most plans miss out on engaging and educating members during the period between when members select the plan and when coverage begins. Plans should access and use contact information gained during enrollment to reach out to and onboard members before their coverage kicks in.

Large national MA plans continue to win market share year over year.

Year over year, big national plans are continuing to win market share during the traditional enrollment period. Our analyses showed that large national plans grew their market share by an average of 1.9% compared to 0.6% for PSHPs, 0.06% for Blues plans and declines for small and medium sized regional plans. This is likely because they national plans are able to offer the most affordable plan options with a rich set of extra benefits that appeal to consumers.

Median monthly change in market share during 2019 AEP by plan type

MA consumers are increasingly drawn to low cost plans—83% of all eHealth Medicare Advantage customers selected $0 premium plans, compared to 76% from the same period last year.⁴ In addition, extra benefits that potentially reduce their out-of-pocket costs are very popular among.⁵ In 2019, plans that offered any supplemental benefit experienced greater enrollment growth than plans that did not.⁶

Implications for plans

To compete with low-cost plan options from, small and medium sized plans must leverage supplemental benefits to grow their MA membership. Standard growth strategies such as offering low-cost plan options are reaching their limits, yet supplemental benefits remained largely untapped. While close to 90% of enrollees have access to zero-premium plans, only 7% of plan products offered supplemental benefits in 2019.

Read our MA Growth Outlook to learn how you can use supplemental benefits to drive growth.

Plan size impacts retention during OEP—large national plans experience greater switching than PSHPs and smaller regional plans.

Despite the advantages of scale that large plans have, data on enrollment and market share during the first few months of OEP also showed that smaller regional and PSHPs retained more members than larger counterparts. PSHPs and small regional plans lost less than 0.05% market share on average during the month of January compared to losses of 0.08% for large nationals and 0.06% for Blues plans.

Median monthly change in market share during 2019 OEP by plan type

This comes as a surprise since large national plans continue to score highly on MA Stars ratings. But beneficiary concerns with the out-of-pocket costs and benefit coverage may influence disenrollment decisions. According to separate Deft research consumers deemed to be at risk of switching products reported negative experiences, like receiving a higher than expected bill or finding out that a drug they filled was no longer covered. Large national plans control premium prices by restricting access to expensive providers and drugs. But benefit restrictions increase the risk for negative experiences as members already have difficulty understanding their benefits and are frustrated when they find out certain services aren’t covered.

Implications for plans

Plans must remain vigilant about providing a seamless experience throughout the year or risk losing enrollees to competitors by focusing on reducing the confusion and difficulty around benefits. Most times members are subject to long wait times, information inaccuracies and transfers from one agent to another when they contact plan customer service. As plans offer new types of benefits and health care consumers’ expectations become more sophisticated, concierge-type customer service models can guarantee that members have a single point of contact to help them stay in network or avoid high out-of-pocket costs. While most plans offer this high-touch service for their most expensive and riskiest members, they should consider offering these services to their entire MA membership—especially those at risk of switching.

Read the Member-Centric Virtual Service Model to learn about the hallmarks of virtual customer service models that prioritize personal needs.

References

2. https://www.kff.org/medicare/issue-brief/medicare-advantage-2020-spotlight-first-look/
3. https://cdn2.hubspot.net/hubfs/2768825/PDF/2019%20Medicare%20Shopping%20and%20Switching%20Preview%20Slides.pdf
4. https://optumkic.cipher-sys.com/OptumKIC/Content/News/_Edit?id=1099953&FromUrl=%2fOptumKIC%2f
5. https://healthscape.com/insights/the-rise-of-over-the-counter-otc-benefits-in-medicare-advantage/
6. https://paretointel.com/insight/expanded-supplemental-benefits-flexibility-medicare-advantage/
7. HPAC MA Growth Outlook Brief