Carrot in the News: RADAR on Medicare Advantage – “Post-AEP Surveying Could Inform 2021 MA Benefit Design”

Reprinted with AIS Health permission from the February 6, 2020, issue of RADAR on Medicare Advantage

With supplemental benefits increasingly playing a role in shopping and switching behavior, Medicare Advantage carriers should be doing everything they can to highlight their supplemental offerings for existing and new customers during enrollment periods. And as product design gets underway for the 2021 plan year, MA organizations that want to stand out in their respective markets should survey members now on what inspired 2020 plan selections and use that data to make localized decisions, experts from Carrot Health and Deft Research advised during a recent webinar.

MA enrollees during the most recent Annual Election Period (AEP) had more plans than ever to choose from, with about 21 available plans for every 100,000 enrollees, compared with 15 plans two years ago, according to Carrot Health, a technology firm that uses predictive analytics to help clients deliver targeted strategies. At the same time, plan benefits are richer than ever, with supplemental benefits being offered by new plans at a higher rate than their competitors, said Spencer Pratt, vice president of product with Carrot, during the Jan. 29 webinar, “AEP Results: What’s Happening in 2020?”

For example, Carrot estimates that 66% of all plan benefit packages in 2020 feature an over-the-counter drug benefit, compared with just 40% in 2018, and 72% of all new-entrant PBPs have an OTC allowance. And 84% of “winning” plans for 2020 offered an OTC benefit, compared with 71% of “losing plans,” Carrot observed.

Moreover, national carriers are driving the bulk of growth in supplemental benefit offerings, generally offering popular services such as meal delivery, transportation and OTC at higher levels across the country, added Pratt.

OTC Tops Supplemental Benefits

While OTC coverage may be popular, how the benefit is structured could be the difference between keeping and losing a member. “Consumers have responded positively, but it’s not good enough to just say you’re going to offer an OTC allowance. You can do $20 a month, you can do $50 a quarter, you can roll over the dollars from month to month, it can be use it or lose it — there are many ways to implement different aspects of a supplemental benefit,” said Tim Brousseau, vice president of client services with Deft, who also spoke during the webinar. And Deft has observed that those consumers who had access to an OTC allowance but were dissatisfied with the configuration were more likely to be AEP switchers.

Ten percent of MA enrollees surveyed in Deft’s annual Medicare Shopping and Switching Study indicated that they switched plans or insurers during the 2019 AEP. But that wasn’t because of drugs going off formulary or physicians leaving the network, which was the case several years ago, said Brousseau. Instead, they shopped to make sure they were in the best plan for them, even if they were happy with their existing plan, and that was partly due to two things: the proliferation of PPOs with more flexible networks and an expanded array of supplemental benefits, or in some cases, a combination of both, he observed.

“You always want to bring in new members through the front door with your bells and whistles like supplemental benefits…but the last thing you want is the consumer [saying] they were satisfied with their plan, they were satisfied with their carrier, but when they shopped and found something better, it was enough to them to effectuate the switch,” said Brousseau. “So when it comes to supplemental benefits, we have to think about this not only from an acquisition point of view, but it’s also a retention play.”

Two insurers that made headlines during the AEP for offering new non-medical supplemental benefits this year were Anthem, Inc. and Cigna Corp. And that strategy appears to be working for both, with Cigna growing enrollment by 12.2% and Anthem increasing membership by 9.6% during the recent AEP, Carrot observed.

During a Jan. 29 conference call to discuss 2019 earnings, Anthem President and CEO Gail Boudreaux attributed the company’s recent enrollment growth to “robust supplemental offerings” — which include healthy food delivery, transportation, alternative medicine and OTC benefits — combined with its “strong brand recognition.” And Cigna, in addition to expanding its MA service area for 2020, introduced benefits in select plans to address social determinants of health, such as an air conditioner allowance, adult day care allowance and expanded transportation, including trips to places of worship and grocery stores.

“Generally, what we’re seeing is the market is adopting and reacting to consideration of non-medical needs,” said Pratt. “Consumers are starting to demand and expect [benefits to address social determinants of health] from their health plans.”

Referring to results from Deft’s 2020 Medicare Shopping and Switching Study — which was released to Deft clients on Jan. 31 — Brousseau said that 10% of people switching “inched up” and for similar reasons. Moreover, all of the enrollment growth in the most recent AEP was driven by $0 premium plans, while enrollment in plans with other premium ranges declined, Carrot found. As of right now, 59% of the market is enrolled in a $0 premium plan, said Pratt.

And “we’re starting to see PPO plans with a $0 premium and the bells and whistles of a supplemental benefit,” said Brousseau. “How competitive and compelling is that to a senior consumer on a fixed income? Know your market, know the competition, know what consumers desire in your market to keep that momentum going into 2021.”

If, for example, a plan is looking at investing precious premium dollars to expand its supplemental benefit offerings or is considering launching a PPO network, it should consider whether that strategy would resonate in all counties of its service area or whether to take an “a la carte” approach, he added.

To help inform those decisions, Carrot is combining its local analytics with Deft’s primary research to launch a Survey Solutions product. The new joint offering focuses on a year-round strategy to look at market dynamics, growth strategies and product preference, and they’ve already partnered with some plans in the MA market, according to Brousseau and Pratt.

Primary research is the first step in a “three-phased approach” with clients, says Brousseau. “Now is the time to survey consumers in your market: They just came off of AEP, they just knew the benefits they had before they switched into a new plan, they now know the new plan, [and] they know all the other competitive benefits that were out there.”

By Lauren Flynn Kelly

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