Get Ready for the Medicare Supplement Buyer Surge
July 05, 2015| By Stacy Varney |
The rate of U.S. Medicare enrollment is increasing, and the pace of growth is unlikely to slow anytime soon. By 2030 the number of people age 65+ is forecast to double in size, reaching 71.5 million; by 2050 it will be over 86 million.1
With the expected surge in Medicare buyers, the share of seniors (those 65 and older) looking for supplemental coverage to bridge the gaps left by Medicare can only expand as well. That puts the onus on our industry to educate and engage this group concerning the choices available to them.
To better understand how seniors in the U.S. make their health insurance decisions and what level of engagement exists between them and insurance agents, Gen Re decided to research how consumers connect with agents and the role agents can play in the Medicare Supplement (Med Supp) insurance buying process.
We surveyed nearly 2,000 U.S. residents in 2014 who had either Medicare Advantage or Med Supp insurance. The findings were interesting; our research shed new light on the decision-making process, revealing the influence agents have, as well as gaps in communication and engagement that agents may not be aware of today.
For example, it’s clear consumers value agents’ recommendations concerning Medicare Supplement plans - whether they initiated the contact with the agent or not. When deciding which option to select, 31% of participants reported wanting a high degree of assistance from a professional. They wanted assistance in a variety of areas, noted in the chart below.
When selecting an agent, nearly 40% of respondents based their decision on a recommendation from a family member or friend. Former employers, physicians or financial planners were also important. Maintaining strong relationships after the initial sale is the best way, in our view, to secure new business opportunities.
In fact, most people said they prefer to have a continuing relationship with their agent and preferred that the agent stayed in touch with a phone call or email at the policy anniversary date, or with updates to share (see chart below). Very few, only 12%, said they never wanted to be contacted. Even for those who had kept in contact, over 50% of consumers, not their agents, initiated the contact at their first anniversary date. Agents take note!
Although they don’t appear to actually drive consumers’ decisions to switch plans or carriers, agents are helpful in comparing the options when consumers are considering making a change.
Another way agents help consumers to make decisions is to introduce them to carriers that are not familiar to them. It seems the likelihood of consumers selecting an unfamiliar company for coverage increases if the recommendation comes from an agent.
To read more on our survey findings, look out for blog posts and a webinar over the coming weeks.