Marketing Health Insurance Supplement Plans to Medicare Members
Effectively marketing health insurance is a significant challenge for those tasked with formulating health care strategies. Members expect coverage to anticipate their needs across a wide-ranging set of potential health issues and wellness goals.
At the same time, they are looking for value.
Providers of Medicare supplemental insurance — so-called “Medigap” plans — face the particular problem of selling additional coverage to fixed-income consumers who already receive some coverage as a basic entitlement and do not readily understand the nature of supplemental Medicare coverage.
Sales are thus based on:
- Understanding members’ preconceptions
- Developing a tailored, concise member education program that addresses these preconceptions
- Differentiating versus other options in the market
- Implementing consistent delivery of that messaging to Medicare-eligible individuals and the loved ones who help them make health care decisions.
What are health care consumers looking for in coverage?
Given the often-rancorous tone of the healthcare debate in the United States, as well as the negative image health insurance companies have in the media, one might expect that many Americans who currently have insurance would be eager to change their health insurance plan.
Interestingly, however, our research has found that the opposite seems to be true.
75% of respondents age 65+ reported being “extremely satisfied” or “very satisfied” with their current health care coverage provider (63% among the general population). Only 2% of age 65+ respondents indicated they were “not very satisfied” or “not at all satisfied.”
When asked whether lower cost or a wider variety of covered services and providers was more important to them in purchasing coverage, over 2/3 of those surveyed age 65+ believed having a variety of choices was more important than price.
It stands to reason, then, that health care marketing strategies should focus more on touting product differentiation, services and brand equity.
How can my product line stand out in a crowded market?
We might take a look at another consumer service industry in which differentiation and value-added are important: hospitality.
Let’s think about this for a minute.
When you stay in a hotel, not all brands are created equal. There can even be differentiation between individual hotels within a brand. All successful hotels provide the basics: a clean bed, a bath and simple amenities like TV, phone, or vending machines. For price-conscious consumers, a Motel 6 is quite enough.
Quite like traditional Medicare which covers the basics —emergencies, hospital admissions, inpatient labs and imaging — but not everything a consumer might seek if they are invested in their health.
In specific instances, a consumer must be willing to spend more to bridge Medicare coverage gaps or offset copays — in essence, be willing to upgrade (if our metaphor holds) to a higher priced hotel where he gets the same basics as a Motel 6, but also amenities such as free wifi, a continental breakfast and an exercise room.
But if you are tasked with selling a Medigap plan, we must go even further.
Though you are selling a plan that provides protection against high deductibles, co-insurances and co-pays not covered by Medicare A, B and D, you are not marketing to the consumer who is only concerned with price.
You are marketing, at this point, to people that seek value over price. A useful way of considering value is the equation:
These are consumers who prefer comfort, predictability and stability.
Value vs. price must be clear for the member.
In the c2b Consumer Diagnostic, we asked participants to rate the importance of a series of 33 health insurance plan/company attributes. Among consumers age 65+, we found that access, brand equity, transparency, consistency and prompt execution of services were the most important attributes sought by the American health care consumer. Reasonable premiums are certainly important, but didn’t make the Top 5 attributes.
You’ll notice some subtle points here.
People didn’t agree that the premium or co-pay must be cheap but, rather, reasonable. Members are willing to spend as long as they see results. They want their plans to provide value-based, reasonable, hassle-free coverage for the doctors and hospitals they already know and trust.
How can I translate this into effective marketing for Medicare-eligible members and their caregivers?
You can start by clearly defining, in lay terms, what you offer.
Medicine is itself complex and intimidating. Health care coverage shouldn’t be. If coverage terms are expressed in convoluted legal language and are not clearly broken down and spelled out in everyday terms, consumers will be lost.
There are nuances in the “words to use and lose” among consumer— especially older, Medicare-eligible consumers. When marketing to a Medicare-eligible consumer or his caregiver, your strategy should be to build trust, communicate effectively, and deliver upon your proposition.