New research shows Medicare consumers need help. But how should you interpret high rates of both overwhelm and confidence within the Medicare population?

Creating a better consumer experience for health plan customers has launched many a startup, from those that offer new products to those that sell them. With Medicare Advantage (MA) enrollment set to eclipse traditional Medicare within the decade, it is a bull market for organic MA growth — most of all for companies that make understanding, shopping for, and buying coverage easier.

Incumbents and new entrants have this opportunity — and plenty of work to do to achieve it. Some 70-80% of surveyed Medicare-eligible adults understand original Medicare or MA features. This according to the new report, Hidden Crisis: The Medicare Enrollment Maze, from Sage Growth Partners and Healthpilot.

In an exclusive with HealthLeaders, Dan D’Orazio, CEO of Sage Growth Partners, notes: “This report has surfaced a very uncomfortable set of findings, primarily that those who may need healthcare the most, and who also have to balance financial stability in their later years, are very vulnerable.” 

Understanding that vulnerability is just the beginning of a mixed picture that includes both consumer confidence and overwhelm while unpacking the consumer decision-making process.

Six key statistics

Sage-Healthpilot statistics show:

1. Medicare-eligible individuals don’t understand Medicare. Only 20% and 31% respectively correctly identified original Medicare versus MA components.
2. Medicare advertising is too much. 63% are overwhelmed by ads.
3. Consumers are confident. 75% strongly or somewhat agree are confident that their plan decisions meet their needs.
4. Wait, no they’re not. Only 31% strongly agree that their Medicare decisions are effective.
5. Maybe that’s why they stick with what they’ve got. Less than 40% shop for a new plan annually.
6. Most do not completely trust the advice they receive. 53% of shoppers had a medium-to-some-to-no level of trust in what they were told about plan options.

These results are from a survey of 1,142 Medicare-eligible individuals that included other data on the consumer shopping, enrollment, and re-enrollment experience.

A critical eye is important

While the Sage-Healthpilot research states that it’s “critical to help Medicare-eligible individuals select optimal plans,” the optimal “plan” may be original Medicare, supplemented or not with Medigap coverage. Unpacking the following is also important:

• Overwhelm vs. confidence. Decision-making is hard in general, as highlighted in a March 2022 Life Kit feature by NPR. Confidence may come from the best choice or on okay one, so long as it’s done. In addition, a October 2021 APA survey found that 36% of respondents found day-to-day decisions more stressful — 35% for major decisions — than before the pandemic.

• Attract vs. choose. Customers will be attracted to an insurer that advertises zero dollar everything — premiums, copays, generic drugs — for a large percentage of plans. What is advertised, however, may not be what is available in their service area and the Sage-Healthpilot research shows that customers search more (81%-83%) for whether their doctor or drug is covered.
• Age, it turns out, is more than a number. While 58% overall stay with their plan, most of these customers are older. More than half of those aged 70-75 (52%) and nearly 60% older than 76 keep their current plan.

What the research does strongly suggest is that consumers, at any given time, could very well be making better choices. As HealthLeaders covered in November 2021, one of Healthpilot’s unique selling propositions is its use of data science — claims data, AI, and risk analysis — to create a better experience for not only shoppers but the payers and providers that partner with them.

Sage’s D’Orazio adds: “I believe that providers and health systems have a tremendous opportunity to differentiate themselves, their services and their plans in what is becoming an increasingly crowded MA world.”