Fast Decisions, Regrets – and Rapid Member Churn

Rapid Medicare member churn is our new and unfortunate reality. Deciding which Medicare Advantage plan to choose is one that has important ramifications for individual consumers. Making that choice, however, is not easy given that this is a highly complex purchase. Star Ratings are helpful but just knowing that the ratings consider approximately 40 measures might be enough to overwhelm the average purchaser, especially if they don’t see a pressing need right now. To assist, plans spend significant resources, time and effort to help consumers decide and acquire new members.

What we know is that large numbers of consumers are not making the best choice for them: a study in the American Journal of Managed Care found that nearly half of Medicare Advantage enrollees switched insurers by their fifth year of enrollment. With many voluntarily churning and switching carriers within the first or second quarter of signing up with a new plan.

Need to Know: How and Why Are Consumers are Making Plan Selection and Deselection Decisions

What we need is a better grasp on how consumers are making these plan selection (and deselection) decisions. Once we have a better understanding of how and why the purchase is being made, we can lower turnover by helping people look at what matters most to them. The potential returns to addressing rapid voluntary churn are tremendously high.

To that end, Predict Health’s team has conducted research to understand how Medicare consumers make these decisions and why they churn. Using proprietary data, predictive analytics, and plan analysis, we found roughly 5 types of consumers. We first want to introduce the groups and will then follow-up with more in-depth observations on each and how and why they churn.

Know Your Five

First, the largest group of consumers, make their decision primarily based on upfront costs. This is a large group, 32% of consumers, and we call them the ‘bargain hunters’. Given that 40% of all plans have no upfront cost, they have a lot to choose from. And that’s also the challenge. Looking to make a quick decision, this group might also be most likely to pick a plan that’s not the best one for them. Our next post will explore how to better engage this group of consumers.

Second, a much smaller group at 14%, focuses on ‘provider first’. They care most about the network. This group pays more attention to Star ratings and is somewhat brand conscious. The right strategy here might be to partner with providers.

Third, the smallest at 12% of our sample, comes in through the broker channel. These consumers are actively looking for advice and so we call them ‘open to advice’.

Fourth, at 24%, might be those consumers who are an economists dream. They try to weigh-up all the different alternatives and are open to making monthly payments. We call them the ‘optimizers’. The catch is that they rarely interact with brokers and make surprisingly little use of star ratings during their decision-making process. But they are most likely to pay attention to extra benefits and so we will spend time on how to make best use of these benefits when we write about this group.

Last, at 19%, is a group who is most interested in coverage. Relatively speaking, they are most focused on brand and second most likely to consider using a broker. We think of them as the ‘completionists’.

Why Do Members Churn And Do Some Groups Churn More or Faster. And How to Address It.

Next, we will look at each of these groups in greater detail and identify some strategies that might be best suited for this audience to engage them and to retain them. Medicare consumers sign up with a carrier and plan for a reason, and if we fail to meet those expectations, they will leave. Knowing who they are, their reasons and expectations for joining and tailoring your offerings and experiences to meet those needs and expectations creates a better member-plan match and will significantly reduce voluntary churn. In a series of future posts, we will share ideas to help you better unpack ways to improve this member-plan match and help your organization grow.

For the moment, we would challenge Medicare plan leaders to look at their current offerings, services and experiences and how they are supporting their consumer types. Are some of the offerings and experiences more likely to appeal to one group of another? And more immediately, how easy are you making it for consumers to make the right decision for them and are you engaging them to meet their needs and expectations so they stay?

- Predict Health Research Team

Rosslyn, Virginia

For more information, contact us at 202-674-6870 or shub@predicthealth.ai.

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