As Medicare Advantage Grows in Popularity, Health Plans Must Meet Market Demands

According to Medpac, the country’s baby-boom generation (born between mid-1946 and 1964) began aging into Medicare in 2011 at a rate of about 10,000 people per day, a rate that will continue until 2030.

Over the next 15 years, Medicare’s enrollment is projected to increase by almost 50 percent— rising from 54 million beneficiaries today to more than 80 million beneficiaries in 2030!

Accordingly, the impacts of this enormous demographic shift will drive the evolution of market demand and the corresponding effective responses from providers and health plans alike.

Some of the key market driver questions include:

• How will the incoming baby boomers affect the age structure of the Medicare population? Will the Medicare population be more racially and ethnically diverse, given the growing racial and ethnic diversity of the total U.S. population?
• Given the improvements in life expectancies, will the next generation of Medicare beneficiaries live longer and healthier lives than previous generations? Or will the longer life expectancies increase the oldest age groups in Medicare, thereby increasing the rates of disease and chronic conditions?
• Have baby boomers and especially the oldest baby boomers had time to recover from the 2007 to 2009 recession before entering retirement?
• What is the outlook for the Medicare program’s financial health as the number of taxpaying workers per beneficiary declines?  
• What is the projected growth in the share of enrollment in private plans, and what do health plans do to be best positioned to address these unique needs?

With sufficient input from market demand, public policy, and the adoption of best practices in other industries, healthcare, and health insurance technology suppliers can offer scalable, data-driven solutions.

There are key areas of focus to address these business challenges, including value-based benefit plans and contract reimbursement development and administration. Customer service is also crucial, including enrollee navigation tools that help older members shop and choose the right health benefit for them and access to expert knowledge-based analysis and provider channeling. In addition, easy-to-use and highly-integrated “traditional” customer service support (e.g., call centers) and increasingly popular self-help tools (e.g., portals, “enhanced CRM,” handhelds). There is also increased use of customer-focused artificial intelligence (AI), particularly utilizing integrated payer/provider data that spans the full continuum of both “member” (health plan view) and “patient” (provider view).

While crystal balls are “foggy,” enrollment in Medicare Advantage and or Advantage-like plans is anticipated to increase at a healthy rate. In turn, the demand for seamless support will continue to evolve. Whether a health plan is regionally owned/provider affiliated or spans the country in a traditional insurance setting, the demand for integrating this population will require significant technical and organizational transformation investment. To do anything less risks missing the next frontier.