The fourth quarter is a stressful time. Not only do brokers have to deal with the same year-end stuff as everyone else, like getting ready for the holidays, it’s also the busy time of the year in the insurance industry. And that’s true whether you sell group, individual, or Medicare products.
For Medicare, the annual election period runs from October 15 through December 7, a mere seven-and-a-half weeks. During this time, we’re expected to renew all of our existing Medicare Advantage and Medicare Part D business while trying to write some new policies. That’s difficult to do because, as we’ve already said, our clients are also busy at this time of the year.
However, it may not be quite as difficult as it seems. That’s because, according to a new report from the Kaiser Family Foundation entitled No Itch to Switch: Few Medicare Beneficiaries Switch Plans During the Open Enrollment Period, only about eight percent of Medicare Advantage enrollees and 10 percent of Medicare Part D enrollees voluntarily switch plans from one year to the next. The study was based on the 2016 annual election period for the 2017 plan year, but KFF says that the numbers stay pretty steady from year to year. In fact, when looking at “ the open enrollment periods between 2007 and 2016, the share of enrollees without low-income subsidies voluntarily switching plans for the coming year ranged between 6 and 11 percent for people in Medicare Advantage drug plans, and between 10 and 13 percent among those in stand-alone drug plans.”
Fierce Healthcare, which reports on the study in a December 2 article, points out that “MA and Part D enrollees on low-income subsidies were also hesitant to switch, as only 7.6% picked a new plan from 2016 to 2017.”
What the report appears to conclude is that, despite the fact that CMS encourages people to shop each year, most consumers are not actually motivated to switch plans. So, again, renewing your existing clients may not be as difficult as you might initially think.
Don’t be too quick to celebrate, though. The fact that most people are staying put does not necessarily mean that they’re happy with their existing plans. For at least some consumers, the hassle of switching combined with a general confusion about the process is enough to keep them where they are.
- According to the Kaiser Family Foundation, “in 2017, more than one in three (35%) Medicare beneficiaries living in the community said it is very or somewhat difficult to compare Medicare options, and this share increased among beneficiaries in fair or poor self-reported health (44%) and with five or more chronic conditions (40%).”
- In 2017, nearly half (45%) of people on Medicare living in the community said they rarely or never review or compare their Medicare options; the share was substantially higher among beneficiaries ages 85 and older (57%).
In other words, the fact that people tend to renew as is doesn’t necessarily mean that our job is easier. On the contrary, it may mean that we will need to push a little harder to get our clients and prospects to shop and possibly to change plans even if they don’t want to. Remember, plan benefits and drug lists change from year to year, as do people’s medical conditions. As brokers, we need to check periodically to see if the coverage our clients have this year is still the best coverage for them next year. If not, we need to help them switch.