What can agents expect this upcoming AEP?

As we approach AEP, we must ask ourselves: what are clients thinking, and what will be different this year? We know that COVID-19 has had a severe impact on the way everyone conducts business, so with AEP approaching, we wanted to share some great consumer research and ideas for success this fall.

According to a study by Deft Research, Medicare Advantage penetration among total eligible members across each of the 3,300 counties, boroughs and parishes in the United States has continued to rise in 2020 by another 1.3% and now represents 35.7% of the Medicare market.

Startups and big nationals have both seen enrollment gains above industry norms over the last year, showing that new and established business can make an impact.

A whopping 87% represents the number of consumers continuing to research and compare Medicare Advantage plans even once they are signed up.  Many reported finding better MA options through online research; however, far fewer switched at just 11%. This indicates the importance of agents developing an effective communication strategy to stay connected and available to answer client’s questions.

Medicare Advantage carriers are continuing to up their game with diversified offerings. Many are offering a wide range of ‘fringe’ benefits, such as meals and transportation, which are highly marketed but less often used. The benefits most used and appreciated are those such as Over the Counter Benefits (OTC) and dental coverage. The highest growth has been for carriers offering low cost plans with a PPO network. The lower cost MA plans were often HMOs; carriers with the highest member growth are combining a low-cost MA with the wider network options of a PPO or at least a Point of Service (POS) options, and it appears clients like to feel they have a choice.

An assessment meant to better understand where consumers are gravitating found that, of all new Medicare Advantage policies available for the first time ever in 2020, over 325,000 beneficiaries chose a $0 premium PPO plan. This means about 50% of all new enrollees are choosing $0 premium plans.  This makes financial sense and, with many coming from a high cost ACA plan, the premium relief must seem like the greatest birthday present they’ve ever received.

Taking a deeper dive, clients, whether coming from group or individual coverage, are familiar with cost sharing and/or HSA’s, which is often referred to as a consumer driven model.  This means the more cost the client shares, the more likely they are to seek a lower cost provider and make better decisions about the use of health care, all of which drives down the cost of premiums.

One thing to remember when discussing $0 premium plans is how Medicare Advantage plans are funded. Many clients cannot believe that they are getting meaningful coverage for $0. A brief description of how Medicare funds private MA plans to provide the same or better coverage is often helpful.

Aging-in in good health is a good time to benefit from a low-cost MA plan. In doing so, there is a responsibility on the agent to ensure you initiate a discussion about the need for stand-alone dental coverage, hospital indemnity and often a cancer or critical illness plan. Building a strong portfolio of coverage when first enrolling creates a successful model for retention and satisfaction with Medicare for clients over the long term.

Another study found that OTC utilization was relatively high compared to other benefits. The highest amount of participation was found in rewards programs for healthy behavior, pharmacy allowances, eyewear allowances, and programs that offered users a financial reward. As a result of this study, agents should consider spending time with clients to identify what benefits are important to them, financial rewards and ‘free’ money for OTC items are very popular.

The good news is that consumers considering changing plans largely did so with an agent and even though many are researching online, they want to discuss their findings with a professional agent. At this time, we are seeing more clients prepared to enroll via a call center. We believe this leads to poorer choices on plan selection and utilization of plan benefits, as the education a local agent provides is often missing. We want to see every community working with their local agent.

Of all consumers who changed last AEP, 40% did so with the presence of a health insurance sales professional; 40% to 50% has been a consistent number over the last few years. Many carriers, especially the larger nationals, have their own agents and call centers to provide more options for clients. Many carriers are weighing their costs and asking the question, is it cheaper to employ a direct field force or pay commissions to independent agents? When it comes to education and service, we believe there is no question that local agents perform a superior service every time.

Local agents have an important role to play; local knowledge and commitment to communities will remain a successful business model for many years to come. Consumers do not want to make changes by themselves, instead seeking the assistance of a professional to guide them through it.

When looking at the upcoming AEP and the differences that will inevitably be posed as a result of COVID-19, one must first look at the statistics surrounding seniors in the midst of the pandemic. Over 65s account for just 16% of the population; however, seniors make up nearly 80% COVID-19 deaths. Seniors are far more likely to feel unsafe because of the pandemic. Over 87% of seniors are concerned for their health to some degree as a result of COVID-19, and 93% are concerned for their loved ones contracting the virus.

As an agent, you must look at these statistics and how they will relate to your AEP plans. You must understand that your clients will likely have a higher level of concern and anxiety around contracting the virus or passing it along to a loved one, which will impact the way they interact with sales channels during AEP. That concern is especially noteworthy when looking at the fact that 83% of seniors believe that, to some degree, the average person is not taking the virus seriously.

As a result, you must look at alternate forms of communication. Between 60-65% of respondents said they would prefer to work with an agent over the phone, with only 9% saying they would like to meet in person as is usually standard. If you must meet in person, consider putting yourself in the senior’s shoes and taking precautionary measures to protect them from a potential transmission of COVID-19. Wear a facemask, use hand sanitizer and practice social distancing. Ask them where they’d be most comfortable meeting and be sure to accommodate any other requests.

This year’s AEP will be largely different than last year’s in many ways, but what hasn’t changed is the consumer’s desire to work with an agent to help them find the best plan possible. It is important that you keep the pandemic in mind and know each of your client’s preferred methods of communications before helping them search for and find the best plan possible.

Make sure you are communicating with letters and phones call in advance of AEP so your clients know you are ready and prepared to review their needs this fall.

Reach out to Weston Peterson or LaRae Mills on LeClair Group’s Medicare team if you have any questions or ideas to share this AEP.