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Medicare and Insurance Switchers: What’s the Motivation?

Every year a relatively small group of Medicare enrollees switch their Medicare coverage.

But why does this happen so regularly? Are they simply bored with their current provider? Can understanding the “why” more deeply help, attract, or retain these people?

Our study on the topic has illustrated that consumers leave their provider for a few main reasons:

a. The consumer has had a negative experience with the provider in the following way:

1. Significant rate increase

2. Poorly coordinated claim or inquiry

b. The consumer moves to another location or out of the service area, which can mean:

1. New county with new rates

2. New state with different plan choices 

Often there is extended discussion about “how would we know” that the consumer is dissatisfied, or prone to churn for that matter. Truthfully, unless we are processing churn analytics on your customer service data, we probably don’t have a clue.

The first step to retaining or gaining new Medicare enrollees is to understand why members are leaving. According to the Kaiser Family Foundation, the main reasons are cost and quality, and here are the key statistics:

— 29% of churners faced a premium increase of $40 or more (24% faced an increase of $30-$40)

— Med Advantage switchers saved more than $17 per month on average and paid less in out-of-pocket expenses

— 14% of switchers decided to leave plans with 2 or 2.5 stars, while only 9% of switchers left 4 to 4.5 star plans

Are you currently monitoring this set of metrics?

If not, you can use other substitute variables to reach the consumer at the moment of decision. For instance, you can monitor:

  1. Move date — you can reach out to people who are “pre-move”, “just moved”, or “moved last year.” The use of an X date marketing scheme has worked very well for many insurance products. It is easy to establish the correct move distance that drives the desired response rate.
  2. Date of birth — the life odometer produces very strong emotional reactions. Reach out to individuals turning 66, 67, or 68. Ask if they wish to suffer another year enduring less-than-stellar service for the fee they are paying. Their answer may be a resounding "No. What can you offer me that is better." I have been using this trigger for 4 decades with great success.

As noted, the percentage of switchers is not high, but 4% of persons over 65 move to another county each year. Let’s simply assume that another 4% experience a negative outcome. In 2020, 64 million seniors will be enrolled in Medicare. If 8% switch, then 5 million consumers will elect a new plan. Is that significant enough for you to build a marketing plan for switchers?

Heck yes.

If you’re interested in learning more about Medicare data or how it can help you gain or retain current members, you can request Medicare counts and speak to a DDG representative through the link below.

Request Medicare Counts Today

Mike Hail
Mike Hail
Mike Hail serves as CEO of Data Decisions Group. Previously, he has been CEO, Web Decisions Group, CEO, Yankelovich, CEO, Knowledgebase Marketing. With 41 years of marketing experience on both sides of the desk, Mike acts as the professional listener and interpreter for our client engagements. He focuses on the data and analytical aspects of our solutions.