Age-ins: Two Markets, Not One.

In 2011, we concluded our annual Age-in Study with the following statement:

This report’s findings lead us to believe it is really going to be all about market segments. Based on health, income, and job status, boomers have differing and enduring health insurance needs that are apparently impervious to health plan marketing. To be most competitive and to maximize market share, health plans must set aside the persuasive marketing model and come to understand and meet the needs of different segments better.

Our recently published 2015 Age-in Study found that this sentiment persists today. And, the primary reason for it is that Age-ins come to the Medicare market with strong predispositions toward either Medicare Advantage or MedSupp insurance.

The basis of this predisposition lies in attitudes about health insurance that can produce interesting market segments, but are not easily used for targeted marketing. For example, whether or not a consumer values the wellness programs a health insurer offers is not helpful when a marketer is asked to produce a mailing list for the sub-set of Age-ins who are most likely to purchase a MAPD plan. Such a list cannot be drawn on that basis.

The 2015 Age-in Study reports:

Medicare Advantage is a product whose network restrictions are accepted by those likely to enroll. Erosion of MA market share only happens when its price climbs to approximately 80% of a $140 MedSupp plan, and even then, a majority of consumers would still choose MA.

And, regarding those inclined toward MedSupp, the report states:

Likely MedSupp enrollees are fixed on that product from the outset. Their need for comprehensive coverage, simplicity, and transparency trumps cost.

Given these entrenched attitudes, the 2015 Age-In Study concludes that perhaps we should stop thinking of Medicare Advantage and Medsupp as competing alternatives to one another. Instead, marketing planning would be more productive if it considered them as different categories. It is likely that consumers first decide on the category they want, then shop within the category for their selection.If marketers were to take this advice, then identifying a list of consumers who are interested in one category or another—in a MAPD or MedSupp plan—becomes very important.

The predictors the 2015 Age-in Study uncovered are the new reality of an expanded Individual Market. Not having health insurance has become rare among Age-ins. And the percentage of Age-ins in the Individual Market has climbed to over 35%. This has important implications for marketers: Age-ins who have purchased on a public marketplace are more likely to favor MAPD plans; those who purchased off-exchange are more likely to steer toward MedSupp.

Income, work status, including early retirement status, and number of hours worked per week, will help to predict the markets consumers fall into. These variables also help us identify who will be “Late-to-Medicare”.

In addition to financial and socio-economic indicators, the study reports on the correlation between health status and the choice of Medicare Advantage or MedSupp categories. When combined, socio-economics, health status, and current insurance status produce a solid way to identify consumers who will lean one way or another.

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