By Ben Kline, Business Development and Joel Andersen, Vice President, Marketing
After considerable due diligence, your organization has decided to launch a Medicare Advantage (MA) plan. You evaluated the market and current MA enrollment. You examined market competitors, such as provider-sponsored organizations, regional insurance firms, and large national organizations. You gauged potential competitor responses, trying to figure out if launching a plan would disrupt current market dynamics.
At this point, many organizations begin to shift their attention to enrollment and financial projections. As with any business endeavor, your organization needs to capitalize on its investment and understand where the membership threshold to breakeven lies. The sooner you can reach that membership threshold, of course, the better. However, many organizations fail to realize that the longer you go with low membership, the harder it becomes to garner traction. Meaning, your approach prior to launch and over the first year becomes increasingly important. You only have one chance to enter the market, and when you do, you want to capture your audience—providers, health systems, brokers, and consumers.
Based on our experience, most organizations underestimate, and often ignore, the importance of the sales and marketing strategy for launching a Medicare Advantage (MA) plan. Why? Some organizations that already manage insurance products in other lines of business may believe that traditional sales tactics will be sufficient for an MA launch. Others might think insurance marketing is purely an actuarial exercise and rely on the price point to drive membership.
From our experience in Medicare Advantage, two items are essential for growing membership:
- Sales and marketing must be involved, and part of, the strategic planning process. They should be involved in all critical strategic decisions regarding the product launch, including advising on the design of your benefit plans.
- A disruptive sales and marketing strategy helps you generate enrollment to ultimately win in your market. Successful plans pinpoint an unmet market need or gap in the market and leverage it—but this requires a highly tailored strategy.
Let’s walk through a common pitfall. In quite a few markets, we see the majority of new MA plans fall into the “me too” trap. They design their plans with a similar benefit structure and provider network to an existing MA product within the market. Their plan may have a slightly lower member cost share, but to the naked eye it appears identical to incumbent plans. To drive plan switching behavior among beneficiaries, you must provide a compelling reason to switch and those reasons must be visible to the consumer.
Many new MA plans also fail to realize that they are not just marketing against other market MA plans, but also against Medicare fee-for-service, Medicare Supplement insurance (Medigap), and standalone Prescription Drug Plans. While identifying competing benefit points is important, addressing the shortfalls of these other coverage options including how your plan addresses those shortfalls is critical. Educating the market on how your MA plan is innovative and transformative (and better than the status quo) can go a long way.
From here, it is critical to design a selling strategy that aligns with your sales channels. The more time you spend with your channel partners, the better. Handing off your new MA product to a series of brokers is not going to be enough. You will likely need to spend time educating your sales channel on Medicare Advantage, and the unique attributes of your plan. Moreover, how you design your product will dictate how you want to sell it. For example, you may have designed your product around a carefully crafted narrow network of providers. Narrow network MA plans call for an entirely different approach, and employment of classic MA sales and marketing approaches will often yield mixed results.
Medicare Advantage provides an attractive opportunity to deliver better care to seniors. To create a competitive advantage, don’t underestimate the power of a disruptive marketing and sales strategy.