E-Brokers Are Poised for Success in Digital Medicare AEP

Reprinted with AIS Health permission from the August 20, 2020, issue of RADAR on Medicare Advantage

As Medicare Advantage organizations prepare to promote their 2021 offerings this fall with no new guidance from CMS on marketing during a pandemic, plans and their broker partners are proceeding as though the safest approach is through digital and telephonic channels. One area that may see more growth than expected is the online broker space, although the investment plans make in that channel will depend largely on their size, competition, location, and how well their own customer service and internal sales departments can back up their increased online presence, experts tell AIS Health.

Unlike the federal government’s Medicare Plan Finder, a website sponsored by an e-broker (also referred to as an electronic marketing organization, or EMO) by no means represents an exhaustive list of enrollment options for a consumer. Rather, the broker contracts with a handful of insurers in a specific market and trains agents on the finer points of those carriers’ products, and the agents earn a per-enrollee commission. Moreover, how consumers end up on an e-broker’s site varies. For example, they may navigate to it after seeing a television commercial for what appears to be a generic Medicare help line or receiving a mailer directing them to the website, or they may land there after doing a basic Google search for Medicare options in their area.

“COVID forced telemedicine to grow three years in three months, and COVID is going to force more sophisticated, more consumer-friendly retail type experiences for digital purchasing of Medicare Advantage,” predicts Lindsay Resnick, executive vice president with Wunderman Thompson Health. “It may not be to the same extreme [as telehealth], but the smart MA plans saw this coming and made investments in that digital experience, and I think you’re going to see more uptake than we’ve seen in past AEPs,” he says, referring to the 2021 Annual Election Period that begins on Oct. 15.

Although many seniors now have a higher comfort level with online channels, it remains to be seen how much switching MA beneficiaries will be doing, given economic and other uncertainties created by the COVID-19 pandemic, suggests Resnick. “I think this is going to be a tough AEP. I think some of the pizazz of all the supplemental benefits has worn off a little bit; I think consumer satisfaction with plans continually shows that they like their MA plan and this year, [they may be thinking], ‘Do I really want to upset the applecart?’ So I think you’re going to see retention’s up and switching’s down, and that means less shopping. You may see some uptick in shopping from price-conscious consumers…but I don’t think that’s going to be a major wave,” he says.

Meanwhile, the pandemic has large EMOs like eHealth, GoHealth and SelectQuote banking on increased traffic this fall. For the 2020 calendar year, eHealth expects 37% of its Medicare major medical plan enrollments (i.e., MA and Medicare Supplement Insurance) to be completed online, compared with 27% the year before, according to CEO Scott Flanders. Originally founded to aid Affordable Care Act (ACA) enrollments, eHealth now maintains a focus on MA and MedSupp and has partnerships with CVS Health Corp.’s Aetna, Humana Inc., Centene Corp.’s WellCare Health Plans and Blue Cross and Blue Shield plans across the U.S.

“Our strategy is always about putting the consumer first. We back up an intuitive online sales experience with personal help and advice from licensed agents by phone. We allow Medicare beneficiaries to review coverage options in their area quickly and easily, showing them which plans are accepted by their preferred doctors and which plans cover their personal prescription drug regimen at the lowest cost,” Flanders explains in an email to AIS Health.

eHealth Sees Uptake in Online Enrollment

During a July 23 conference call to discuss second-quarter 2020 earnings, Flanders said the company saw Medicare applications submitted online increase by 300% from the year-ago quarter. But increased plan choices and shopping among MA consumers has also led to greater customer churn, and the company as a result has taken steps to increase “member retention and recapture,” moving away from a purely “transaction-driven strategy,” he said.

Chief Revenue Officer Tim Hannan during the call clarified that the elevated churn was seen through the Medicare Open Enrollment Period that ran from Jan. 1 through March 31, and one of the first steps eHealth took to address it was to make improvements to its telephonic sales process and to expand its full-time agent force through a new remote staffing model that relies less on vendor partners’ “less tenured agents.”

Enhancements for the coming AEP include a greater percentage of in-house agents, advancements in eHealth’s “strategic partner channel, including a number of important new partners,” “deeper carrier relationships” and a new technology platform, the customer center, added Flanders. Some of those partners include hospitals with three-year exclusive deals. And a lot of carriers are dedicating more resources to the telephonic distribution channel, which Humana indicated during its recent earnings call.

GoHealth Takes Long-Term Approach

Another option in the EMO space is GoHealth, a Chicago-based company that recently launched an IPO and recorded $231 million in revenue in 2019. Although it began operating in the health care technology space before the ACA, Chief Marketing Officer Jarret DiToro says GoHealth “did mature and scale considerably as a company during the height of the ACA” and “naturally extended” its efforts into the Medicare market.

In an email to AIS Health, DiToro says GoHealth seeks to differentiate itself by “taking a customer-first, carrier agnostic approach.” This means it operates on a “customer Life Time Value basis” and strives to place customers in their best-fit plan. “We view enrollment as the first step in a very long relationship with our members,” says DiToro. “Beyond plan enrollment, we look to help our members qualify for state and federal subsidy to supplement their Medicare benefits, and we look to help them better understand the intersection of their health needs and their plan benefits.” To that end, GoHealth representatives schedule follow-up sessions to make sure the plan is meeting the consumer’s expectations. And through its Encompass platform, it offers free health risk assessments that can result in “plan feature activation around risk points.”

GoHealth’s plan partners include “essentially every major [MA] payer” such as Anthem, Inc., Aetna, Cigna, Humana and UnitedHealth Group, as well as “strong regional players” like Kaiser Permanente, Blue Cross Blue Shield of Michigan and WellCare. And while the company “had pretty much full carrier representation pre-COVID,” DiToro says where the pandemic has helped GoHealth is “in the fact that we offer potential customers a safe alternative to plan enrollment that doesn’t require someone to visit them in their home. So the adoption of our service has accelerated somewhat from a member enrollment perspective.”

Plans Need a Healthy Distribution Mix

Cary Badger, principal with HealthScape Advisors, says he’s had numerous engagements with plan clients this year on the use of e-brokers, and he recommends they view it as “an incremental augmentation” of their overall distribution strategy and ensure a balance that includes a strong direct-to-consumer platform.

EMOs tend to demonstrate “core competencies that health plans have been lagging in historically,” he tells AIS Health. Their websites are supported by major call centers “with redundancy for peak volume, such as during annual open enrollments,” they are “highly adept technically,” and they are good at generating leads that are managed in one central location and responding to them quickly.

The catch, of course, is that plans are competing against other plans through the EMO channel. With commissions ranging anywhere from $500 to $630 for initial enrollments and half that for account renewals, the cost of doing business with an EMO can be significant, and plans must factor those commissions into their computation of the lifetime value of the member, which includes retention, adds Badger.

“One of the things we coach our plans on is if you are going to expand into these spaces, you better have really good information systems that you can compare against their performance internally to see how you’re doing with your outreach, your ability to get to a consumer quickly on the phone and retention rates by channel,” he tells AIS Health. “So if I sign someone up through my call center at the health plan, how’s that retention rate over time [compared] to when someone signs up online [through one of these EMO] agents? You have to be able to look at the information that’s generated by those leads at a fairly articulate level to understand whether this information is going to help you understand the contribution each channel is making to your growth target.”

Large EMOs often contract with several national players and supplement each market with regional ones, so if you’re a smaller plan and it’s not worth competing for that partial share of an online broker’s business, you can still contract with a vendor to purchase the technology to launch your own shopping experience with broker support, adds Badger. “There are a lot of different evolving business models to compensate for that space,” he says. “A local organization might not produce as many leads, but they may have the technology and presence needed in this new COVID-19 and post-COVID marketplace.”

In addition to the large EMOs, there are field marketing organizations throughout the country that have also developed digital channels, and that’s accelerated as a result of the pandemic, says Resnick.

By Lauren Flynn Kelly

HealthScape can help.

From insight to execution, HealthScape works with clients to define and redefine their Medicare Advantage strategies and with COVID-19, Medicare Advantage plans face an even bigger challenge in this year’s Annual Enrollment Period (AEP). Recently, HealthScape’s Cary Badger provided a unique perspective on the anticipated shifts and their results in a LinkedIn article.

Contact Cary Badger at 206.849.9437 for more information.