Reprinted with permission from AIS Health from the Feb. 18, 2021, issue of RADAR on Medicare Advantage

Recent data from the 2021 Medicare Annual Election Period (AEP) reflects the anticipated increase in Medicare Advantage enrollment, which is up 9.8% from a year ago and indicates penetration exceeding 43%, according to industry estimates. But multiple factors are making it harder for MA organizations to attract new members, and while plans are enhancing their benefit offerings to stay competitive, they must do so in a way that aligns with their star ratings and other financial goals.

For our occasional series of interviews that examine pertinent issues through the words of the industry’s leading executives, AIS Health spoke with GHG Vice President John Selby, whose long career in the insurance industry includes 10 years in various roles at Horizon Blue Cross Blue Shield of New Jersey. In his new role at the Convey company formerly known as Gorman Health Group, he is responsible for developing and executing growth strategies for GHG and its clients.

Editor’s Note: The following interview has been edited for length and clarity.

AIS Health: According to the latest Medicare Shopping and Switching Study from Deft Research, switching among MA members during the recent AEP fell 21% from the prior-year period and overall switching was down 18%. Do you think insurers should take this with a grain of salt given the disruptions of 2020 (e.g., COVID-19 pandemic, presidential election) or is this indicative of a larger trend?

John Selby: I don’t think it was a surprise that we saw less switching, but I don’t believe that this was entirely an anomaly created by COVID. There’s been a trend toward stabilization over the last few years, particularly as more plans become 4 star [and] as the plans are becoming more stable, experiencing fewer rollercoaster rides — whether it’s related to premiums or benefits. So I think this is a trend that we’ve been seeing and with the plans that we’re working with, as we’re trying to help them find ways to become even more stable, and really it’s driving retention.

If you look at an area like supplemental benefits and the way many plans have been looking at those and increasing the value of the benefits that they have, that’s just creating more stickiness. I think that is a really good example of an area that could continue to move the needle in this direction going forward. The challenge that comes during AEP is members are more satisfied with the plans that they’re in, and that’s an area where it gets more challenging for folks on the carrier side to try and find new ways to market not just during AEP, which is becoming increasingly expensive. Obviously, the turning 65, new-to-Medicare market is critical, but then what other market segments do you start to parse out outside of or even within AEP that are maybe a little bit more untapped? And those are areas we’re looking at with the plans that we work with to try and develop strategies around that, which would include product and marketing and things like that.

AIS Health: What do you think accounts for the people who did choose to switch plans?

Selby: One would be network: The first question people ask is, is my doctor in the network? The second might be mobility: Folks that are in an HMO are maybe looking to go into a PPO and have a little bit more mobility there. And then the third would be — assuming that there aren’t many major changes in the medical benefits — year-over-year, formulary-driven changes (e.g., drugs that were previously lower tier that moved to higher tier).

The other thing, too, is not to ignore the impact of stars. I personally think stars has all sorts of ramifications, not the least of which is if you are 4 stars, you can invest more in your plan which then makes it more competitive. But if you’re in a non-4-star plan in a market that’s got a proliferation of 4-star plans, just word of mouth alone about what you’re hearing from your neighbors and friends who might be in other plans could be a cause of that. And I do think some of that is directly or indirectly related to stars.

AIS Health: You mentioned supplemental benefits and how those are leading to some of consumers’ stickiness. People may be signing up for certain plans because they are attracted to the supplemental benefits and stick with the plan because they like what they are receiving, but some insurers have expressed concern about being able to sustain these offerings from year to year. Is this something you’re hearing from clients, and what are you advising them?

Selby: What we hear from brokers and agents is how critical supplemental benefits are becoming, and have become, really, so that’s part of the validation. The way I view this is, there are a lot of tenets to what you do around plan design. You’re trying to improve quality, you’re trying to improve the member’s experience, you’re trying to provide relevant services to them; and I think that’s where we see some of the creativity around supplemental benefits. But at the end of the day, if you don’t have the revenue you can’t sustain the benefit offering and so stars and risk adjustment are critical, in my mind, to being able to build a strong revenue base and sustain a strong revenue base.

I used the term before about the rollercoaster — that’s what you have to avoid. If your benefits, and premiums especially, are volatile and are not fairly consistent year over year, members are going to lose trust or faith, brokers are going to lost trust or faith, and it becomes an uphill battle because even if you could come back to a zero-premium plan, for example, for one year or two years doesn’t necessarily mean that people are going to be totally comfortable with that. The supplemental benefits are sort of the biproduct of having a strong infrastructure in place that’s keeping your revenue consistent.

AIS Health: How can plans determine which supplemental benefits will be critical to maintain?

Selby: I’m sure some are going to become table stakes more than others. The way we’re trying to guide plans here is to look at the big picture. There’s certainly a marketing value to offering supplemental benefits, and there’s a perceived value to the benefits, but what we like to try to have a conversation around is how are those benefits adding value? If you go back to not that long ago, especially in a D-SNP [Dual Eligible Special Needs Plan] environment, a transportation benefit was valuable and it was logical. If people can’t get to the doctor, they can’t get care, etc. Now there’s that bigger view of the member [and] the things that they need, so what we are trying to do is to solve the bigger problem. Can you address not just the members’ needs and the members’ satisfaction but also look at things from a quality standpoint and a clinical standpoint? And if you can, that’s going to pay off in [the star ratings]. And so that’s where we see things going. Whether the pace of new benefits will continue, I tend to think that’s going to plateau at some point in the not-too-distant future. I think the plans that can figure out how to connect the dots between these things and solve more than one problem through their benefit designs, through supplemental benefits…are the plans that are going to have a more solid foundation and something stronger to build upon going forward, so that’s the conversation we’re having with our clients.

Contact Selby via Alyssa Barone at abarone@paretointel.com.

By Lauren Flynn Kelly