Connecture Analysis: Shopping Up, Enrollment Channels Shift for Medicare Part D as More Consumers Rely on Brokers
December 06 2016 - 9:00AM
Data collected from Connecture, Inc. (NASDAQ:CNXR) indicates that
shopping for Medicare Part D plans is up by 17 percent from last
year’s Annual Election Period (AEP), and the share of all
enrollments through multi-carrier brokers is up by 8.4 percent,
from 29.8 percent to 38.2 percent. The AEP deadline for enrolling
in Medicare Advantage and Medicare prescription drug coverage for
the 2017 Plan Year ends December 7.
Connecture’s analysis suggests that while shopping is up, more
consumers are delaying their plan selection and enrollment to
identify the plan that provides the best coverage at the lowest
possible price. This may be particularly important to consumers as
costs for mandated prescription drug plans (PDP) have increased 9
percent to 12 percent over last year.
However, consumers who look only at the lowest premiums plans
rather than the plan’s total annual cost could be in for a rude
awakening.
Premiums vs. Total Annual Cost“When we compare
Medicare beneficiaries who had the benefit of comparing total
annual cost which includes premium, deductible and co-pays, to
those who may have only considered premium, we see a dramatic
difference in the number of beneficiaries enrolled in their
‘best-fit’ plans,” said Jim Yocum, Connecture’s Senior Vice
President of Federal Programs. “Typically, beneficiaries with
access to total annual cost information are four times more likely
to enroll in the lowest cost plan versus those who do not have
access to this information.”
Connecture aggregated the total annual cost for a sample
population of 50,000 Medicare beneficiaries and found that this
group spent $172 million dollars in total premium and out-of-pocket
costs—or about $1,870 per beneficiary. If those same consumers
enrolled in plans based only on the lowest possible premium, their
out-of-pocket costs would have been $2,229 or 16 percent higher
than the sample.
“It’s clear that for all beneficiaries, regardless of their
prescription drug needs, they are more likely to enroll in an
overall cheaper plan when they are able to compare the projected
total costs of the premiums plus the out-of-pocket expenses,” said
Yocum. “Premium amounts bundle and obscure the total cost of health
spending in a year, making rational tradeoffs difficult and leading
to higher overall costs for Medicare beneficiaries. Without this
visibility, picking a plan based solely on premiums leaves
consumers vulnerable to higher out-of-pocket costs and lower
satisfaction with their selected plan. For both consumers and plan
sponsors, comparing and enrolling in plans based on total annual
costs ensures better transparency, cost and ultimate product
satisfaction for all involved.”
Providing Real Choice to ConsumersDue to
increased plan premiums and rising drug costs, more Medicare
beneficiaries are seeking help from brokers who can provide
shopping and enrollment services. As a result, Connecture found
that shopping activity and enrollment by brokers is up 27 percent
and 17 percent, respectively, this AEP.
“Most people have limited understanding of the nuances of health
insurance. Brokers and health insurance agents remain critical to
stakeholders in this process, strategically leveraging their
expertise to create a more informed consumer,” said Jeff Surges,
President & CEO of Connecture.
In addition, brokers who specifically leverage health plan and
drug comparison technologies can provide Medicare beneficiaries
with more comprehensive and cost effective plan comparison and
enrollment options.
“The lesson for brokers and health plans is that health
insurance continues to be complex and intimidating for most people.
By offering the right technology you are better positioned to help
consumers and members find coverage and other benefits that suit
them best,” said Surges.
Consumers looking to enroll in Medicare Advantage and Medicare
prescription drug coverage should do so by December 7, 2016, the
end of AEP for 2017 Plan Year coverage. Connecture provides
technology solutions to 20 of the top 25 largest health plans and
for Medicare.gov.
About ConnectureConnecture (NASDAQ:CNXR) is a
leading web-based consumer shopping, enrollment and retention
platform for health insurance distribution. Connecture offers a
personalized health insurance shopping experience that recommends
the best fit insurance plan based on an individual’s preferences,
health status, preferred providers, medications and expected
out-of-pocket costs. Connecture’s customers are health insurance
marketplace operators such as health plans, brokers and exchange
operators, who must distribute health insurance in a cost-effective
manner to a growing number of insured consumers. Connecture’s
solutions automate key functions in the health insurance
distribution process, allowing its customers to price and present
plan options accurately to consumers and efficiently enroll, renew
and manage plan members.
Media Contact:
Matt Schlossberg
Amendola Communications for Connecture, Inc.
(630) 935-9136
mschlossberg@acmarketingpr.com