Wednesday, February 3, 2016

Are Your Marketing Efforts “Locked-In”?

Much has emerged lately of concerns voiced by carriers offering ACA-compliant programs, that various SEPs (Special Election Periods) adversely affect the forecasting of costs, and add to the difficulty of maintaining the profitability necessary for a carrier to continue to offer such plans, particularly through the exchanges.

While the forecasting of costs is obviously a huge factor in determining the viability of plan offerings in any insurance offering, things in the “Medicare world” aren’t exactly the same as in the world of those directly eligible for coverage under the Affordable Care Act.  The Special Election Periods for those on Medicare programs generally have a much longer track record, and allow agents working that market a different track to consider.

Some of the SEPs may be similar to those in the ACA arena (moving from one service area to another, losing or gaining group coverage, etc.), the Medicare world also offers other reasons why a beneficiary can legitimately and compliantly change their coverages.  These allow agents to focus on certain segments of the market, with marketing strategies designed to reach these different segments.

Three areas of focus an agent might consider:
  • Low Income
  • Those with certain health conditions
  • Higher income individuals
The Low Income segment could be broken into two sub markets, comprised of those who are true “Dual Beneficiaries”, Medicare/Medicaid recipients, and those eligible for LIS, Low Income Subsidy recipients.  While similarly categorized here, these two groupings may have much different expectations, and require different marketing approaches.  They may also qualify for different programs, with the Dual Beneficiaries eligible for Dual Special Needs Plans (DSNPs), and those who qualify for assistance on the costs of their medications and the plans that cover them (the LIS recipients), more appropriately covered through regular Medicare Advantage or Part D Rx plans.  Both of these groups qualify for continuous Special Election Programs (SEPs).

Folks with certain chronic illnesses may well be served through Chronic Special Needs Plans (CSNPs).  While certain illnesses may well be considered chronic, they may not have a CSNP offered to beneficiaries in their area.  These programs do have a Special Election Period available, but they do have to have the condition that makes them eligible for the plan verified by their physician.  These folks obviously offer differing opportunities and challenges to the agent, but what with so many of our Medicare population affected by chronic illness (many with more than one chronic condition), “Lock-In” is not so restrictive as one might believe.

That final category, higher income individuals, comprise a large portion of the beneficiaries who are Medicare Supplement, or “Medigap” policyholders.  Medicare supplements are regulated differently than Medicare Advantage and Part D plans, and are not subject to “Lock-In”.  They are, however, many times subject to medical underwriting before being able to change from one Medicare Supplement to another.  They comprise a market that tends to be of higher income, with the additional marketing opportunities that come with additional disposable income.

So, along with the differences we identify in the market itself, we find the need to tailor our marketing to differ as well.  This is not only to reach different people differently, but also to stay compliant with the regulations that affect theses different segments of the Medicare market.

For more ideas on how to approach these different opportunities, visit the Tools section of our website -

We look forward to pursuing the different possibilities with you.

-John Dubas, VP of Senior Marketing


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