May 20, 2014

According to a recent study from the Kaiser Family Foundation, seniors find the process of choosing a plan to be confusing and frustrating. That process, along with some other factors, makes them reluctant to switch plans each year. When they do look at switching, they seek advice from insurance agents, medical professionals, friends, and family. Understanding your clients’ point of view can make you the trusted advisor they need.

Medicare is confusing

Why are some seniors not enrolled in the lowest cost plan?

Sometimes, they realize that often, cost is about more than just the premium. The premium is important, but other things are too, such as;

  • Access to specific providers
  • Familiarity with the name of the insurance company
  • Plan representatives and marketing (credibility)
  • Being on the same plan as their spouse
  • Good coverage for drugs and medical services

Beneficiaries find it difficult to compare plans

The average 65 year old receives loads of information from various sources, including direct mail, television ads, phone calls, and more. They may have tried to compare costs, coverage, and provider networks, but find it frustrating and confusing, so they rely on agents as trusted advisors. Many people also try to get suggestions from friends, and from pharmacists and doctors offices.

Many enroll in the lowest cost plan initially, but do not switch later

Even as costs rise and their needs change, many seniors simply stick with the plan they have. Costs are important at first, but not as much after they are enrolled.

Why do people tend to stay in the same plan from one year to the next?

Comparing and choosing plans is so frustrating, seniors are hesitant to do it again

People cited the following as reasons to stay where they are;

  • Choosing an insurance plan is frustrating and overwhelming
  • Open Enrollment is not typically viewed as an opportunity to find a better or more affordable plan
  • Open Enrollment is only once per year and timing may not be ideal

Seniors are more likely to change their care before their plan

Many people go to considerable lengths to make their existing plan work, rather than finding a new plan, especially with Part D plans.

Cost increases are expected

Most seniors see this as inevitable, and don’t see the increases as surprising. They seem to tolerate increases until they hit roughly $75 per month, at which point they consider looking for alternatives. They sometimes view lower costs suspiciously. They may assume that a lower cost means less coverage, higher co-pays, or limited choices.

Many are not aware of their options

Among people in traditional Medicare, many are not aware of the choice between traditional Medicare and Medicare Advantage plans, and ended up in one or another without having made a conscious choice. Some are generally uninformed about plan options, including the option of changing plans during the open enrollment period.

What drives people on Medicare to switch plans?

When people do decide to shop for a new plan, it’s because either their needs change, or their existing plan has changed. If costs have risen to an amount they can’t tolerate, or they are not getting the care they thought they needed, they will switch. Higher drug costs, tougher utilization management restrictions, limited pharmacy networks, or learning that their doctor or hospital is no longer covered by their plan will also trigger a person to switch. When they do switch, the process is much like when they initially chose their plan - they seek out an agent in most cases.

What do beneficiaries suggest to improve Medicare?

The Kaiser Family Foundation surveyed seniors, and asked what they would do to improve Medicare.

Their responses were;

  • Increase access to in-person help for choosing plans
  • Explain more clearly how people might benefit from a change in plans
  • Create a user-friendly online tool to help beneficiaries narrow down their plan options
  • Advertise the star-rating system
  • Retain plan choices

Every industry has its own jargon. While you know all about Medicare, Medigap, Medicare Advantage, and Part D, your clients only deal with this when they absolutely must. As an agent, it’s important to “get in their heads” and really look at things from their perspective. When you do this, it shows that you are listening to their needs, and that you care. It’s your job to explain all the options in plain, easy to understand terms, so that your clients can make an educated decision. Use this information to tailor your message to clients and prospects, and make sure they know that switching plans can save them money, without a catch. Be their trusted advisor. Help them and they’ll spread the word!

View the full report here:


What do you hear from your own clients? Add your comments below.

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