Consumers' Unexpected Costs Offer an Opportunity for Health Plans to Improve Member Experience  

Deft Research is on the cusp of publishing its 2018 Medicare Shopping and Switching Study (reporting consumer activity during the 2017 annual enrollment period).  This annual study covers both the reasons seniors have for shopping and switching as well as the channels they use for information, decisions, and enrollment. 

Each year, the annual enrollment period (AEP) creates the occasion for most seniors to review their health coverage.  In recent years the number of seniors in Medicare Advantage plans has grown slightly faster than the number in MedSupp, (also known as Medigap or Supplemental Medicare).  This means that more seniors are in plans with relatively complicated rules related to provider access, cost sharing, and drug coverage.  MedSupp consumers, because they have avoided a health plan with a provider network, face fewer rules in that regard.  But almost all MedSupp consumers purchase stand-alone Prescription Drug Plans (PDPs) and these are managed care plans with coverage policies and limitations.

 Based on past results and dipping into the newest preliminary findings, the health insurance currently serving seniors, taking MAPD and MedSupp together for now, is generating eight generalized reasons for seniors to begin a fall shopping journey.  

1. Drug Coverage. Whether it’s the need for better coverage of generics or brand drugs, these blend together for seniors who struggle with copayments and deductibles.  These concerns account for more senior shopping that any other category of consumer experience.  Within the drug coverage problem lie persons whose health has led to many prescriptions and high monthly copayments, persons whose health has recently deteriorated -- leading to new costs, and persons whose doctors don’t check formularies before prescribing -- leading to unexpected medication management at the pharmacy.

After conducting their investigations, many senior shoppers conclude that better drug coverage is not available from other plans.  Nevertheless, drug coverage is the top reason for shopping and an important driver of switching.

2. Provider Access. Many seniors say they have had trouble making appointments with primary care physicians at times they find convenient.  Many also report dissatisfaction with the timeliness of specialty appointments.  These problems may be generated more by health systems than health plans, but they still cause seniors to shop and some to switch.

Health plans that can offer solutions to provider access problems, may develop a competitive advantage that attracts consumers.  Such solutions might include contracting terms – for example, provider bonuses for better customer service – and they might include technology – for example, telemedicine.

3. High Out-of-Pocket Costs. Consumers experiencing this problem are often those who have had a serious health event that exposes coverage realities.  When consumers mention high out-of-pocket costs, they are often thinking beyond ordinary copayments.  These consumers have had to pay out-of-pocket up to their deductible, they often have been hospitalized, and they may have been prescribed a medical device that was not completely covered.

Serious health events are both liabilities and opportunities for health insurers.  When consumers are left to flounder, they will be motivated to find a different insurer.  When consumers are given assistance in navigating the system, guidance on saving money, and even guidance on financing high costs, they can become an insurer’s most loyal advocate.

4. Dental Coverage. Along with drug coverage, dental coverage stimulates the most shopping among seniors.  But unfortunately for seniors, better dental is usually nowhere to be found.  Senior dissatisfaction lies in both inadequate coverage and inadequate care.  Ideally, seniors tell us they would like it if the system helped them take better care of their teeth because, as one senior has put it, “when the health of the mouth gets bad, the health of the rest of the body might follow.”

Many seniors live with unaddressed dental issues that they feel they cannot afford to pay for without help.  Current basic dental plans don’t address these needs.  It is a difficult problem, but one that, if addressed, would create tremendous market differentiation for the innovating plan.

5. Copayments for Doctors. Distinct from “high out-of-pocket costs” as a reason for shopping and switching, some seniors focus on doctor copayments as their most important source of dissatisfaction.  These may be seniors with chronic illnesses that are not experiencing acute events, but instead require frequent visits to more than one doctor.  In these circumstances, doctor copayments can add up to monthly expenses that erase the savings MAPD premiums were supposed to provide.  In other words, seniors can reason that they would be better off in a MedSupp plan despite its higher premium if it meant they could see doctors without incurring copayments.  Age-ins also use this logic.

Health plans can use claims data to identify frequent-visit consumers.  Many health plans have outreach programs to help these folks.

6. Referrals and Prior Authorizations. Health plan policies designed to control the flow of patients to specialists have always created friction between plans, their members, and providers.  Over the past decade, due to a combination of better health plan communication, more liberal policies, and better provider referral practices, the number of seniors exposed to this problem has declined. 

The referral and prior authorization issue is not as common as it once was, but it is a potent driver of switching when it does occur.  One third or more of the seniors experiencing these administrative actions, will leave that plan at the next AEP.

7. Disruption of the Primary Care Doctor Relationship. Over the years, no health plan has really had the market position to keep its membership while enforcing policies that create widespread disruptions.  But, sometimes because doctors quit networks, and sometimes because health plans terminate doctors, network membership changes and doctors are no longer available under preferred coverage terms.

This is also an infrequent but potent reason for seniors to switch insurers. 

8. Claim Denials or Billing Problems. About one in twenty seniors have claims denied or experience bills they wish to contest.  A trend among health plans has been to reduce the frequency of consumer friction created by administrative muscle flexing.  When it happens, half or more of the consumers affected will leave the plan at the next opportunity. 

These eight sources of consumer dissatisfaction have persisted for many years.  This list provides a roadmap for health plans interested in solving persistent problems and, by doing so, beginning a new chapter in private health insurance services.