Medicare Advantage enrollment and penetration continue to steadily increase. To meet demand, Medicare Advantage plan options are expanding and becoming more competitive, both with one another and with original Medicare plans.
For payers, onboarding is an early touchpoint for initiating positive and enduring relationships with new members. A good experience from the outset can improve member retention, ensure high-quality plan performance and health outcomes, and garner favorable Star ratings from the Centers for Medicare & Medicaid Services (CMS).
However, the results of a 2021 Medicare Advantage member survey indicate that most respondents were dissatisfied with their onboarding experience.
Survey respondents also identified the activities they would like to see integrated into onboarding. Payers may use this input to help them optimize the onboarding process as a point of differentiation while also delivering better care and outcomes in an increasingly competitive market.
In 2020, CMS changed the way it calculates Star ratings, giving substantially more weight to customer experience metrics than in the past. In this environment, effective member onboarding is increasingly important, and it will remain critical in the Medicare Advantage ecosystem for years to come.
Medicare Advantage penetration is on the rise
Since 2015, the total number of Medicare beneficiaries nationwide has increased by 19 percent, from 54 million to 64 million. During the same period, total enrollment in Medicare Advantage plans jumped from 17 million to 29 million, a 65 percent increase (Exhibit 1), while enrollment in original fee-for-service (FFS) Medicare dropped by one million.
Medicare Advantage penetration has also increased—from slightly more than 30 percent of enrollment to approximately 45 percent. By the end of 2030, penetration is projected to grow to 55 percent.
As enrollment and competition—that is, more payers offering more plan options—have increased, so has the number of annual shoppers, including newly eligible individuals and those dissatisfied with their current plans. From 2015 through 2020, for example, churn edged up by 1.5 percent.
Medicare beneficiaries have more options in 2022
Medicare is a large and growing market, attracting the attention of many payers and service organizations. Medicare Advantage payers are expanding into new geographic areas and offering new plans with more diverse benefits. New entrants to the market are eager to identify distinctive value propositions—for example, a wider network of doctors, or nonmedical benefits such as meals or transportation—to carve out a niche and establish their right to win. All this activity may increase flexibility and provide more options for seniors.
The increased competition, combined with demographic shifts (such as more individuals reaching retirement age), is improving market growth—but also increasing churn. Medicare Advantage payers are aggressively targeting beneficiaries of original Medicare and new retirees, who are making first-time plan selections.
Medicare beneficiaries have an average of 31 Medicare Advantage prescription drug (MA-PD) plan options in 2022, up from 24 in 2020 (Exhibit 2). Eighty percent of US counties have more plans available in 2022 than they did in 2021, and 57 percent of counties saw an increase in the number of payers offering plans.
Gaps in onboarding
When onboarding, most survey respondents received information via mail, but only a small percentage were further engaged, such as with a health questionnaire or an offer to enroll in a rewards program (Exhibit 3).
Plans have only one chance to make a good first impression, and members are apt to recall their onboarding experience—favorably or not—when annual election and open-enrollment periods roll around. Onboarding serves as the conduit to transition from the sales process to the membership journey. That experience may substantially
influence initial and ongoing engagement as well as overall satisfaction and retention rates.
According to our survey, many Medicare beneficiaries found the onboarding process lacked many elements that could augment their experience. Sixty-six percent received details on their plan, care, and coverage in the mail; smaller percentages received this information through other means. Fifteen percent reported not receiving it at all.
Beyond basic plan information, only 19 percent said they were asked to complete a health assessment, and just 5 percent reported that they were asked about their social needs. Less than 10 percent of members noted that their plan helped them enroll in additional benefits or arranged an in-home provider visit. These results suggest that payers, brokers, and others in the Medicare ecosystem have an opportunity to design and implement a more thorough onboarding process and to improve the member onboarding experience.
Four factors to consider
Member satisfaction metrics also point to opportunities to improve (Exhibit 4). Less than half of respondents said they were fully satisfied with four key new-member experiences: access to resources, including those concerning specific medical conditions (42 percent); digital offerings to improve health (48 percent); the process of selecting a primary care physician (49 percent); and the process of enrolling in additional benefits (49 percent). At the same time, respondents indicated that these benefits are increasingly important in the plan selection process.
Optimizing touchpoints by striking the right balance
Gaps in onboarding present opportunities for payers to differentiate themselves. For example, Medicare Advantage members are most interested in additional outreach from payers. As shown in Exhibit 5, seniors report a high level of interest in getting notifications about new benefits and programs (49 percent) and signing up for rewards programs (43 percent).
On the one hand, many plans are trying to reduce excessive touchpoints to improve Star ratings
and reduce potential member abrasion. Yet members typically do not complete their first Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey for at least six months after enrolling, so plans have an early opportunity during onboarding to drive high-impact engagement.
It is also important for plans to consider how they execute onboarding. Many plans include messages on topics of interest to members in onboarding packets, but these messages are not always relevant to individual members. Plans can consider adopting innovative and omnichannel communications strategies, maximizing impact by reaching members with the right message through the right channel at the right time.
Improvements in annual wellness visits
Onboarding could encourage members to schedule and attend annual wellness visits (AWVs), also known as annual physical exams. These routine exams provide the critical preventive care members need and can accurately assess a member’s health risks. They can also take place early in a member’s care and onboarding journey, enabling the development of plans that have a range of potential downstream impact (for example, Star-related care gap closure and improved risk coding accuracy).
However, 31 percent of members reported that they missed at least one annual physical exam in the previous five years (Exhibit 6). More than half indicated that their payer had not offered an in-home option for completing this critical preventive assessment, limiting the impact of in-home visits on increasing access to care.
Star ratings are important for both payers and consumers
Payers’ lack of engagement at the beginning of the care journey may prompt members to voluntarily disenroll during open-enrollment periods, which has a negative impact on Star ratings. Meanwhile, CMS Star ratings are giving increasing weight to member experience and payers’ administrative operations compared with clinical outcomes. Star ratings are important to payers for several reasons—for instance, they allow plans to receive bonus payments for strong performance, and they influence plan decisions by future members. In fact, 56 percent of seniors reported that Star ratings were one of the top features they considered when shopping for Medicare Advantage plans (Exhibit 7).
Onboarding new members is necessary for the success of health plans. Developing this capability may seem daunting to payers, but effective early engagement could improve member experience and loyalty and promote a seamless path to care. Incorporating member feedback into onboarding design could deepen members’ commitment to their health as well as their confidence in their health plans.
As churn rises and member acquisition costs grow, it is unsustainable for payers to continue to reacquire members annually. Instead, payers could consider the opportunity to encourage current members to enroll in supplemental benefits, sign up for rewards programs, schedule annual wellness visits, and enter a lifetime of health and satisfaction with their Medicare Advantage plan.