Where did your organization fall with CMS’ estimates for 2016 & what’s next?

October 9, 2015
|In Sales & Marketing, Strategy
|By GHG Advisors

 

In September, the Centers for Medicare & Medicaid Services (CMS) estimated the average Medicare Advantage (MA) premium will decrease by $0.31 next year, from $32.91 on average in 2015 to $32.60 in 2016. The majority of MA enrollees (59 percent) will face no premium increase. Sounds great, but the reality is most MA and Part D plan sponsors are finding it more challenging than ever to keep premiums low and still maintain attractive benefit packages and viable business/financial models.  $0 premium plans in some markets are now the anomaly. Do you keep premiums low, pare down supplemental benefits, and increase copays, or take the hit for another year and hang on, hoping you will make up the financial loss next year or when those risk adjustment scores and Star Ratings align? 

According to CMS, about 65 percent of MA enrollees are currently enrolled in plans with 4 or more Stars for 2016, a significant increase from an estimated 17 percent of enrollees in such plans in 2009.

So, the question is, where did your organization fall with CMS’ estimates for 2016?  Now that competitive premium and benefit information are available for review, I am sure your organization is among the many updating competitive analyses to see what the real situation is. If not, you need to.  “Gorman Health Group (GHG) receives a number of requests for benefit analyses as soon as benefits are publicly released,” stated Charro Knight-Lilly, Senior Vice President of Client Services. “It is truly the only way an organization can understand their benefit differentials and make the appropriate changes to marketing and sales strategies.”

So what’s next? For the short-term, it is time to pull your Sales and Marketing teams back together to review where you actually fall in line for 2016 against your competitors and refine or, in some cases, rework the strategies put in place based on competitive assumptions. Ask yourself:

  • Will my marketing dollar garner the projected return on investment under our original strategy, or should I shift my dollar spend?
  • Should my messaging change based on competitive product and benefit differentials?
  • Should my sales distribution strategy change in order to meet close ratios?

With the Annual Election Period (AEP) for Medicare health and drug plans now underway, there is no time to lose.

Have questions or need information?  Contact Charro Knight-Lilly, Senior Vice President of Client Services at cknightlilly@ghgadvisors.com, or contact me directly at nlennig@ghgadvisors.com.

 

 

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