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Why do Medicare Advantage customers switch plans?
Aug 28, 2023
By Nate Jacoby, Derek Skoog and Peter Davidson
Customer satisfaction is often the key to attracting and serving Medicare Advantage members. Health plans continually focus on improving the health plan experience as an investment in their members. The rate of Medicare Advantage disenrollment is low, with roughly 80% of members continuing with the same plan year over year and over 90% continuing with the same carrier — with slightly higher rates of switching plans in rural settings. When customers do switch, they tend to choose a plan with similar characteristics to their previous plan, with the majority of this population opting for a $0 premium plan. Additionally, new beneficiaries frequently opt for a $0 premium plan.
With Medicare Advantage penetration rates nearing 50%, not only are health plans competing with each other, but they continue to compete with original Medicare offerings and consumer preferences for fewer restrictions on their care. Retaining members is important not only to the health plan’s growth, but also to long-term profitability as they have better insight into the clinical needs of their members and can quickly support them as they age and develop additional care needs.
In a crowded market, it may be difficult for health plans to stand out, and confusing for consumers to compare and choose a plan. As a result, many Medicare eligible beneficiaries begin to narrow down their choices based on the premiums that are being charged, cost of their prescription drugs and the network status of their primary care physicians. Competitive health plans continue to refine their offerings to maximize value to the member in these areas. Plans have also continued to enhance their digital portals, creating an ability for their beneficiaries to track their health progress, monitor their claims or prescriptions and engage in health-related activities alongside their health plan.
After enhancing their product offering, Medicare Advantage plans work with brokers to help expand their outreach during the annual enrollment period, where beneficiaries have an opportunity to change their plan for the coming year. This time of year is critical for organizations to understand their consumers’ needs and targeting new Medicare beneficiaries and members who are looking for other options.
PwC’s data can help Medicare plans understand local market dynamics and switching behavior to evaluate their current market position, safeguard their membership and identify opportunities for growth. For additional details, review our analysis and contact us to discuss further.
Lauren Holladay, Ashley Trefelner, Shobana Iyer and Jingpu Wang also contributed to this article.
Sources:
Prescription drug coverage, General Information, CMS.gov, Prescription Drug Coverage - General Information | CMS
Monthly Enrollment by Contract/Plan/State/County, CMS.gov, Monthly Enrollment by Contract/Plan/State/County | CMS
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