Any massive packet written in “CMS-esse” can unsettle even savvy seniors. But, the fact that ANOCs deal with something so important as Medicare coverage can further ignite powerful reactions, including the impulse to shop. But, how does the “ANOC impulse” compare with the impulse generated by competitors’ mail? Or even, mail sent by the senior’s current insurer?

Deft Research’s recently published 2012 Benefit Design and Market Dynamics Study:Trends in Medicare Consumer Shopping and Switching Behavior delves into all of the triggers and channels that helped steer seniors to their final decision this last year. The Benefit Design and Market Dynamics Study details seniors entire journey from attitudes about current coverage, to shopping triggers, to relative effectiveness of marketing channels, to benefits with the greatest lure, and ultimately, to enrollment or renewal.

Also in this year’s Benefit Design and Market Dynamics Study:

Why Medsupp members switch to MA? How can MA plans capitalize on this? What do Medsupp plans need to do to safeguard against future attrition?

The evolving role of the agent. How have agents driven value in their member interactions? What does this signal for the future of on-line enrollment?

MA and Medsupp premium price sensitivity. At what point do price increases force otherwise loyal members to “test the waters”?

The relationship between brand strength and shopping. Brand building is not just a vehicle for new member acquisition, but an absolute necessity for decreasing attrition in a STAR environment.

How can you look into this further and receive a FREE Executive Research Brief?

For a Free Executive Research Brief and to receive more information on the 2012 Benefit Design and Market Dynamics Study: Trends in Medicare Consumer Shopping and Switching Behavior or the other two reports in our 2012 Senior Market Intelligence Service contact VP of Client Services, George Dippel by phone at (262)697-1370 or by email at gdippel@deftresearch.com

The Business Managers’ Outlook study gets into the heads of small, midsized, and larger business managers to examine how reform will impact the future of employer-based health benefits. Our study examines business managers’ current preferences around design, coverage, and cost sharing while indicating which new trends will dominate their future needs.

Study Overview:

Respondents for the study were business managers who work for companies with 3-500 workers, and make decisions or recommendations concerning health benefits. 509 managers participated in the study.

Local Market Projections:

The Business Managers’ Outlook study examines how various sized businesses, with various labor compositions, and differing business strategies look at the future for employer coverage. Our rich data base can be combined with local employment data, coverage rates, and wage information, which allows us to project what employer sponsored coverage will look like with reform for any country or state defined area.

In the Race for Members, Insurers Must First Understand These New Customers:

Understanding businesses is fundamental to gaining trust and building scale in the 2014 exchange marketplace. Small groups have distinct health insurance needs. They are particularly sensitive to cost, have limited resources, and often need in-depth education concerning health insurance options. But, in order to successfully meet the needs of future clients, health insurers need to first understand whatthose needs are .

And They Need to Start Now…

Deft’s Business Managers’ Outlook study tackles many of the questions health plan managers need to know including:

• Of businesses providing ESI, what percentage will cease to do so in the very near term?
• What elements of exchange functionality do small business owners want the most?
• Which business and industries need the most help in understanding the value of exchanges?
• What % of businesses are planning to:
• Eliminate spouse or dependent coverage
• Switch to tighter networks
• Move towards a defined contribution model
• How likely is it that mid-sized employers will opt for private exchanges?
• What role will brokers play in the future and how is that affected by the creation of State Exchanges?

and much more…

Want More Information?For more information about the Business Managers’ Outlook study or the other two reports in Deft’s Health Insurance Under 65 Market Intelligence Service contact:

George Dippel
VP of Client Services
by email at gdippel@deftresearch.com
or by phone at (262) 697-1370

We look forward to hearing from you soon!

This study examines the most likely shopping activities that current and future individual market shoppers would pursue. Deft identified which marketing channels various segments of consumers turned to first when entering the market, to what degree current employers would be sought out for advice, and how key interest search words would affect shopping.

Study Overview

Research Dates – August 20-29, 2011

Target Population – aged 19-63 who work for employers with less than 1000 employees, purchase health insurance directly, or are not employed.

Sampling Frame – 3487 responses were obtained nationally.

To learn more about this study, contact:

George Dippel at 262-697-1370
or gdippel@deftresearch.com

Richard Hamer, Principal
612-436-8318

The study is part of Deft Research’s Senior Market Intelligence Service. Each year, clients of this service receive three full primary research reports illuminating consumer activity, loyalty, perceptions, and behavior among seniors and Age-ins. Respondents for this July, 2011 study are U.S. citizens or permanent residents, aged 63-67 (excluding those who will receive their health benefits through a group retiree or military program after age 65).

With 3,604 participants and a national scope, this study was large enough for regional analysis of specific plan coverage areas. The study examines retirement and its effect on product preferences; consumer loyalty; shopping behavior and preferences; and the “life-course” of the shopping process.

In some respects our view of the aging boomer generation remains unchanged since last year’s report. But this report has added health status to our understanding as closely associated with boomer retirement prospects:

-Many who retire early have lost their jobs and/or have poor health which may be a barrier to regaining employment.
-To compensate, 63% of 63-64 year olds plan to, or have already taken Social Security before they turn 66.
-There is also a group of higher earnings and healthy boomers who either enjoy the luxury of early retirement or continue working in presumably stimulating and rewarding jobs.

The upshot?

Only 54% of 63-64 year olds plan to look for Medicare related insurance when they turn 65. The rest will remain in commercial insurance or forego additional Medicare insurance.

The various circumstances of leading boomers don’t completely explain their preferences for Medicare-related insurance. But circumstances seem to have much to do with the stability of those preferences over time. If thinking about or trying something new is a risk, then many leading boomers are not in a position for it. Because most have limited income and many have limited health, the boomers are turning out to be a cautious batch. This is reflected in the stability of their product preferences over time.

The study is not all dark…

It does identify one thing that can re-open closed boomer minds – Star Ratings. Whether they know its make-up or not, a 5 star rating system is meaningful to consumers and can dramatically sway their assessment of alternative health plans.

Drawing from other studies as well as this, our conclusion is that the path into boomer hearts lies along broad avenues such as Star Ratings and Brand Positioning. The details of MAPD operations and medical management will leave most consumers indifferent.

The health plan marketing orientation may need to change. We believe that stable preferences reflect real needs and therefore market segments. Plans should reconsider marketing campaigns based on the frequency of contact in the 9 months before the 65th birthday.

This study indicates that campaigns based in brand building and targeted segments over a longer period will bring more Medicare consumers to the door. They will come because with an extended amount of time, marketing can effectively build trust, association with quality ratings, and general awareness that are the broad paths consumers travel.

The effort to reduce enrollment costs by encouraging Internet enrollment may require extra innings. Leading boomers prefer the Internet for many services. But no matter the path of their Medicare investigation, they most often enroll with a paper form.

Agents won’t be removed too soon either

Independent agents are sought by boomers to reduce confusion. And their use becomes more common after seniors have spent one or two years in the Medicare program.

Moreover, agents are developing a role within Internet culture. They have coined the term “co-browsing” to describe the on-line searching, comparing, and enrolling they do with clients. Their value as a source of professional verification seems secure.

This report has found several barriers to change: consumer preferences are stable, paper forms are preferred to Internet enrollment, and agent value is being positively re-defined. Health plans will experience resistance when they face these headwinds. Instead, health plans should consider a strategy more compatible with the reality of consumers.

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.

To learn more about the 2011 Age-in Study contact:

George Dippel at

262-697-1370
or

gdippel@deftresearch.com

Richard Hamer, Principal

612-436-8318

Deft Research is proud to announce the inaugural year of:

Health Insurance Under 65 Intelligence Service

Three Critical Business Questions; Three Timely Research Reports

As healthcare reform nears, managers in the Under 65 industry need to know:

1. …what are optimal plan designs for today’s individual and small group member who will likely both occupy tomorrow’s individual marketplace– inside or outside of the exchange?

2. …what are the shopping pathways and points of market entry for various segments of the population?

3. …how will small businesses manage employee coverage as reform nears?

1) “Health Insurance Design”

Deft’s first study, “Health Insurance Design”, will identify ideal benefit structures for various segments of the under 65 population. This study includes a plan simulator tool where respondents will adjust costs shares and benefit levels illustrating the preferred mix of benefit and cost. Deft will report the results of this exercise by age, income, health status, and current insurance status so that managers can understand member trade-offs by target segment. This study will also shed light on consumer preference to shop inside or outside of the exchange by segment.

(Internet study with expected sample size @ 2,900 across the U.S. Additional sample and questions available depending on market and survey length. Post-publish date re-fielding possible.)*

Design Date: March, 2011 Field Date: April, 2011 Publish Date: May, 2011

2) “Shopping Pathways and the Internet”

The second of three studies will examine the most likely shopping activities that current and future individual market shoppers will pursue. Deft will understand which marketing channels various segments of consumers will turn to first when entering the market, to what degree current employers will be sought out for advice, and how key internet search words will affect shopping. In addition to likely search phrases, this study will also probe into other internet shopping activity and the likelihood of enrolling through the internet and the exchange.

(Internet study with expected sample size between 2,000 and 3,000 across the U.S. Additional sample and questions available depending on market and survey length. Post-publish date re-fielding possible.)*

Design Date: June, 2011 Field Date: July, 2011 Publish Date: August, 2011

3) “Business Managers’ Outlook”

A wild card leading up to the implementation of reform is the response of small business owners prior to implementation. “What types of businesses will retain group coverage for their employees? Who will push them to the individual market? Will small businesses be a viable channel to pursue as a member influencer? How will the economy affect the number of new members flowing from small group to individual?” These questions and others will be posed to a panel of small business owners, HR executives, and benefits managers and reported in late summer.

(Internet study with an undetermined sample size of small business managers across the U.S. Additional sample and proprietary questions available depending on market and survey length. Post-publish date re-fielding possible.)*

Design Date: September, 2011 Field Date: October, 2011 Publish Date: November, 2011

* NOTE: Research specifications and publish dates subject to change. Future study content may be influenced by client input and changing health reform conditions.

To learn more about this new service, contact:

George Dippel at 262-697-1370
or gdippel@deftresearch.com

Richard Hamer, Principal
612-436-8318

The 2011 Medicare Benefits Design & Market Dynamics Study isolates shopping and switching triggers for both the “economic shopper” and the “value-oriented shopper” so that plan designers and marketers can better understand the motivations behind consumers who are most likely to consider new plans.

To learn more about this study, contact:

George Dippel at 262-697-1370
or gdippel@deftresearch.com

Richard Hamer, Principal
612-436-8318

With 2,700 participants (including 500 shoppers who switched to a different health plan this year) and national in scope, this study is large enough for regional analysis of specific plan coverage areas. The study examines market composition, senior shopping behavior, emerging web-use trends, perceptions of plan value, advertising effectiveness, and cost-sharing outcomes. The study was published March 8, 2011.

To learn more about the 2011 Market Dynamics Study, contact:

George Dippel at 262-697-1370
or gdippel@deftresearch.com

Richard Hamer, Principal
612-436-8318

With 2,500 participants (including 500 shoppers who switched to a different health plan this year) and national in scope, this study is large enough for regional analysis of specific plan coverage areas. The study will examine market composition, senior shopping behavior, emerging web-use trends, perceptions of plan value, advertising effectiveness, and cost-sharing outcomes. The study will be published in spring, 2011.

To learn more about the 2011 Market Dynamics Study, contact:

George Dippel at 262-697-1370
or gdippel@deftresearch.com

Richard Hamer, Principal
612-436-8318

In the chart above, the blue line shows how strongly various facets of trust are linked to its overall concept. The chart shows 13 market differentiators Medicare health plans can use in decisions about developing a market position based on trustworthiness. For instance, the chart shows that “assuring patient safety” is strongly related to trustworthiness. If you can back it up, it is an excellent brand position to promote. Health plans who choose this brand position also promote their trustworthiness. Other trust differentiators have their own direct impact on increasing loyalty and reducing switch intention:

- taking care of people when the worst happens
- understanding the needs of seniors
- serving many people in the area

Holding a market position with these differentiators means it is likely the plan is also more trusted than competition.

Click here for a full version of this Research Brief

To learn more about the 2010 National Senior Loyalty Study:

George Dippel at 262-697-1370
or gdippel@deftresearch.com

Richard Hamer, Principal
612-436-8318

Deft’s National Senior Loyalty Study, with responses from 4,379 consumers aged 65+, features a “Switch Intention” metric which has proven to be a reliable leading indicator of switching during Medicare’s fall Annual Election Period (AEP).

Prior to the AEP, Switch Intention measures consumers’ inclination to “be on the look out”, “actively look into new health insurance” and “definitely plan to switch”. Over the five years of the study, the Switch Intention rate has corresponded to the actual rate of health plan switching observed after the AEP.

SENIOR SWITCH INTENTION AND ACTUAL SWITCHING RATES

SOURCE: NATIONAL SENIOR LOYALTY STUDY, DEFT RESEARCH, 2010

The chart shows us that, over the past five years, the red line’s rate of senior switching has increased, on average, 1.7% per year – meaning, the number of switchers has increased roughly 350,000 seniors per year.

In the past two years, Switch Intention has forecast actual switching  – for each of these years Switch Intention has equaled about 64% of the actual switch rate.

Who Might the Shoppers Be?

Those with middle incomes.
Income does not help understand or predict switch intention among current Medsupp customers. But among MAPD customers the impulse to look for a better deal is strongest among middle class consumers – those with incomes between $25,000 and $100,000.

Those aged 70-74.
Among MAPD customers, the impulse to shop and possibly switch peaks between the ages of 70 and 74, then begins to decline. Surprisingly, for Medsupp customers, Switch Intention remains relatively stable from 65 through 80+.

Those with the lowest premiums.
Consistent with findings from Deft’s Market Dynamics Study, MAPD consumers with premiums between $0 and $30 have, by a small margin, the highest Switch Intention rates. These consumers tend to be economically driven bargain hunters who shop every year.

Those with per diem hospital copayments.
For MAPD customers only, those with per diem hospital copayments are more likely to be looking than those with per stay copayments or deductibles.

Those with primary care copayments above $20.
Rates of switch intention increase as primary care copayments increase from $0 to $20. But after $20 the damage seems to have been done. Consumers paying copayments higher than $20 have a high rate of switch intention, but the rate does not continue rising.

To learn more about the 2010 Loyalty Study:

George Dippel at 262-697-1370
or gdippel@deftresearch.com

Richard Hamer, Principal
612-436-8318