Stewart Gandolf

Hello everyone. Welcome again to our podcast. Again today I have scored a fantastic guest. I think you’ll agree with me when we get into it.

Today I’ve invited Doug Spray to join me and I’ve worked very closely with Doug on multiple clients. Doug is our strategic advisor for a really interesting to do with Medicare or Medicaid when we have clients of the health plans or those kinds of issues where it requires that specialized expertise, so Doug works with our team and leads to those kinds of efforts and oftentimes we’ll just point out relationships for us.

In addition, Doug also has his own market research firm, ASQ-360, market research, and so sometimes we’re for Doug in that way as well.

Doug, welcome.

Doug

Thanks, Stewart. It’s good to be here.

Stewart Gandolf

Doug is one of the most sort of strategic put-together person people I’ve worked with in a while.

I love that. Doug, to get done with you. We get done with a client meeting. Boom, there’s the notes.

Everything’s ready to go. It’s so nice. It makes our lives so much easier, so I appreciate all the work Doug brings and especially the strategic insights.

So to that and today, we recognize that our audience is really broad here. We have people that are from hospital health systems, multi-location providers, form of device, SaaS, Telehealth, and Medicare Advantage and Medicaid plans and health plans. So today, for those of you that are in the health plan world, I think you’ll find this particularly timely and useful for those of you that are from other worlds, I think you’re still going to find this a fascinating dive into Medicare or Medicaid.

Today we’re going to focus on Medicare to understand how that all works. And I think there’s a lot to learn even if you’re not in that world.

But today we’ll primarily focus on folks that are working in Medicare Advantage. So Doug, as we go through this, please remember to give a little bit of context.

Want some of all the folks that don’t understand the vernacular to make sure we don’t just leave them blind in the dust.

Each of these niches, by the way, as you know, are all different, right? We work with Pharma or Medicare or whatever.

They’re all different. So Doug, Medicare Advantage is in the news. It’s changing. have a new administration coming in that will be interesting to see how that impacts it because it’s like, we love Medicare, we hate Medicare. You know, it’s like this controversy happening more frequently, so I’d love to hear your thoughts about what’s the overall status of Medicare Advantage?

You know, how do the new CMS proposals and physician cuts are going to shape the market? Like, what’s going on out there?

Doug

You know, so it’s interesting. Had we had this conversation, oh gosh, maybe two or three weeks ago, it may be a different story than it is today.

Last year, as we headed into the calendar year 2025 AEP, there was a lot of worrying concern. CMS had cut the rates last year and there was expected of a rate decrease again this year and how that would affect the profitability of the plans, how it affects benefits available for the beneficiaries of the consumers.

And yet, you know, things never seemed to stay the same. Last Friday, CMS provided their first look at payment proposals for 2026 and they’re actually proposing a 4.33% rate hike, which basically comes to about $21 billion more in federal payments compared to last year and that’s huge from previous years where these increases read under 1% or even negative and so the landscape is never static. We can never say we know what’s going on and so predictability and you can go back and look at some of the some of the prognostications from last year of what this year is going to be like.

Well that’s now kind of all up in the air and a couple of reasons for that. One: this has just been proposed by CMS. It doesn’t mean that it’s in place. We have a new administration coming in just a few days and though the administration has said that they want to help and support Medicare what will end up happening remains to be seen.

So from that perspective we’re still in a wait and see mode. Now with this announcement some good things that can come to that.

Potentially for the plans and the members there might be richer benefits. Last year there was a reduction in benefits.

There was a reduction, an increase in premiums, an increase in deductibles, because the plans were really worried about their profitability.

Now don’t get me wrong, Medicare Advantage plans are profitable businesses. However, when you look at Wall Street as example, last year, the probability started dipping.

And so there was a lot of concern there in terms of how they said, how would they remain profitable going into this next year, especially with the CMS imposed reductions.

But CMS came back at 4.33% as their proposal. So this may actually impact providing better benefits than suspected. addition or the addition back in of some of the supplemental benefits. And then hopefully some stability in the premiums. There is one impact here on positions though. Part of this proposal was a cut again in the fee schedule. And so physicians are feeling the squeeze there. And so networks might be squeezed by this. But again, these are just proposals.

So we’re going to see what happens. One of the other proposals that happen to the whole mass advantage space. you know as you know mass advantage is two parts: it’s the Medicare Advantage plan and or the Part D plan and so about 96 percent of those have a Medicare Advantage plan have a Part D portion of it and there was a proposed Max for this year about $2100 which basically remains the same over last year where some increases due to to growth in the economy But so what does this really mean these are significant improvements if they go in place Last year was a 0.2 percent cut in 2024 it’s 1.1 percent cut So this really helps offset some of those utilization costs But we have to wait and see On the stock market side insurance stocks have risen just recently this week based on this news Some analysts are basically predicting that there’ll be further improvements under the new administration And the stabilization may help return plans into the marketplace. Last year we saw 18 different plans exit the market and so that was a decrease of about 6.54% of what’s available in the marketplace.

So where does that leave us? That’s a really good question. Medicare Advantage in general, when we look at it has grown over the last several years in terms of its penetration rate, we’re at about 55% of all Medicare beneficiaries right now being a Medicare Advantage plan.

That’s roughly 33 to 35 million seniors and it’s on track to continue to grow. In fact, some expectations will be 60% penetration by 2030, which is just five years away.

What’s really interesting about that too is that in five years in 2030 that will be the first year that we switch from all boomers being part and above being part of Medicare Advantage and the first year Gen Xers.

so it would be really interesting to see how that changes the landscape of marketing and benefits and delivery systems.

But, from the Medicare Advantage footprint, it continues to grow. As I mentioned, we’re at about 55% now, and we see that continually growing.

So as we face into that, what is the bottom line? This 4.3% increase won’t solve all the probability challenges that plans have.

It will provide significant relief compared to recent years, and it should help plans maintain their benefits if not increase them all working towards better target margins.

When we look at the plan base in this past AEP, there were 4,000 different plan offerings. And what I mean by that is not companies offering an MAPD plan, but actual plan.

So with one in one company, you might be able to get an HMO plan or a PPO plan. So there were 4,000 opportunities last year in these plans.

And that’s with a 6.5% decline in plans offering. As we go into this year, right now, there are about 34 actual companies offering an MAPD option.

18 exited last year. However, I’ve heard there are some rumors out there that there are some plans that will be entering the marketplace for 2025 to offer 2026 benefits.

In terms of looking at the overall current stage, you know, it’s the big ones United Healthcare, Humana, CVS, Aetna, they account for about 58% of all Medicare Advantage enrollees.

United Healthcare and Human alone control 47%. So the landscape challenge for the smaller or medium-sized plans is there in order to be able to gain that market share.

However, these larger entities are the ones that are having some of the greater profitability issues. So, going into 2026, small and medium-sized plans have a great opportunity as long as they’re putting together the right mix of their marketing to gather market share.

Stewart Gandolf

Okay, well that was a lot and I appreciate all the statistics. So, how are the Medicare Advantage conversions from original Medicare or MedGAP trending and what’s changed in the marketing channels in the program for money? Shift towards, you know, more tech savvy boomers, like what’s happening there?

Doug

Yeah, that’s a good question. So, you know, as Medicare Advantage has grown over the last several years, you know, the question is where are these where these beneficiaries coming from?

And traditionally, it’s really being pulled from those that were on the traditional original Medicare as we went into the privatization of Medicare.

The the wooing was done by the Medicare Advantage plans to those on original Medicare, saying that they would get additional benefits and and, you know, better fees and things like that.

And so, so the original Medicare and also the Medicare supplement became fodder for pulling members in. However, as those populations have started to decrease, we’re really entering a phase now where competition is really between Medicare Advantage plan and Medicare Advantage plan.

And so, you know, at the end of the day, when you’re head is up and you’re trying to get new members from another Medicare Advantage plan that is offering very similar types of enefits, similar premiums, deductibles, max amount of pocket, the reliance on some of these supplemental benefits has come to play.

When we look at the market, every year, the amount of people that are switching grows. It’s not huge. When we look at that MA to MA conversion, around 33, one out of every three seniors will shop.

So, for example, this last AEP, about a foot of the seniors took a look at plans and said, yeah, I might consider switching.

But in reality, we only think about 16% of those that actually end up making a switch. A good chunk of that from traditional Medicare to an MA plan drawn by the extra benefits, max amount out of pocket protection and zero premiums that the MA plans can provide.

And then from the med sub, know, med gap premiums are rising, you know, 150, $200, a month. There are cost conscious consumers or seniors who really want that zero premium and any plan.

So, it’s really attractive. But what we’re finding is that even with that, that inversion that switching to an MA plan is around 16%.

That’s what that means to marketers, is you have to be really savvy. You have to have your right message, you have to have your right target, you have to understand their behavioral, and so you have to understand how that comes together based on their age group, whether they’re new to Medicare.

This is their first or second year in a Medicare Advantage plan, or they’ve been in a Medicare Advantage plan for the five, six, nine, 10 years, wooing those individuals is a little harder.

Doug

So where this really is kind of affecting the conversion, um, as I mentioned, it’s really Medicare advantage plan to Medicare advantage plan.

And the companies that can really differentiate themselves and their messaging the way they localize themselves to the local market and the beneficiaries, the better they’re going to be at that.

And of course, adding on the supplemental benefits and making sure that they have parity in their core benefits, being their premiums or deductibles, their maximum out of pocket.

There is something interesting that’s looming out there, and that really is the role of the broker. In previous years, brokers have really been instrumental.

In fact, some surveys will tell you that anywhere between 40 to 60 percent of a Medicare beneficiary’s decision is affected, improved on, done by a broker or a field marketing organization.

what’s happened last year, CMS came out and said, know, we want to make some changes here. We want to put some caps on spending and commissions.

And, you know, people thought that that’s what was going to happen, that there would be a final ruling that standardized commissions, but a cap on age of broken non-salar compensations and some other things.

Well, it ended up in court. And so right now, we’re still not sure. On the average, broker commissions last year did increase, but not really knowing if that court decision is going to come out in 2025 or 2026, when that happens, it is going to really affect that broker-member relationship because there will be more parity in terms of what brokers can do and parity in terms of the commitment.

So, as we look at those conversions, those are some things that we’re keeping our eye on, see how they’ll be affected next year, but as we look at it right now, in terms of 2025 and looking into this year’s AAP, we have to go with the fact that things are going to stay as is.

And so, the same approach in terms of your split between direct marketing, direct-to-consumer marketing,-panel marketing will remain the same.

Stewart Gandolf

So, I love the, by the way, the data, Doug, because it helps guide marketing decisions, that’s, you know, as an agency, as you know, we always talk about data-driven marketing.

But I think the insight about, you know, how many times now it’s no longer convincing to try Medicare Advantage, it’s more about switching.

That’s a whole different kind of a game in terms of marketing messaging and appeal. And, you know, I think that this particular category, from the outside, feels like it changes, but it changes a lot, as we’re talking about right now, in fact, the timing of our recording of this podcast we wanted to wait a little bit in 2025 make sure that we knew what was the latest was does it will change again next year. And maybe next week for all we know. So the the one of the things that you know we talked about offline was the marketing fundamentals Marketing as seniors and the cost concerns like let’s talk about that a little bit.

Doug

Yeah, so, you know you mentioned earlier, you know, there’s so many different niches and a different type of nomenclature that’s used But when it comes to marketing, right? There are long-standing marketing truths And especially when it comes to health care, and these are rooted in trust building Education Simplicity Local relationships.

These are really what’s at the heart. I would say of Medicare advanced marketing when we’re talking with a senior population And you know, this is why CMS exists.

It’s that layer of protection to prevent fraud or taking advantage of of seniors. And so when a Medicare Advantage plan is looking at some of these, you know, what stays, you know, all these changes, what stays, there are seven things I think that shouldn’t change and haven’t changed.

And the first is trust is everything. When we look at the Medicare Advantage beneficiary, they rely on relationships. They rely on word of mouth.

In fact, when you’re looking at that MA to MA conversion, after direct mail and after TV as being the most influential channels, word of mouth is the third most influential channel.

It’s about 20 percent say that word of mouth is why they switched plans. So having that ability to rely on word of mouth, the agent credibility and the trust that’s built with a plan that says they are local and provides local, those are good for the Medicare beneficiary market.

What’s not good are the too good to be true pitches. The use of the word the free, underline free, bolded free. Although great word for direct response marketing, it’s become tiresome in this market because they’ve come to not necessarily believe those as really influential differences when they’re making their decision.

So trust is everything that stays core. Education trumps selling. All we would have to do to prove this is take those 34 plans from last year and gather all their marketing material and throw it out on a table and ask for differentiation and it would be really hard to see because everybody is talking about the zero dollar premiums or the low deductibles or the maximum out of pocket or the unique blend of benefits.

But what seniors really want, they get that. They know those are the things they’re looking for and those are the things they’re concerned about.  You know money is important to them, but what they prefer is to be educated rather than sold.

They respond much better to thorough unbiased information without high pressure tactics that details things for them like cost and what do they mean?

What do the premiums mean? How are the deductibles developed? is you may have heard the term MOOP maximum out of pocket?

What does that mean? And these matter to them and understanding those in terms of their ability to make a switch.

There was a study done last year and talked about the anxiety that is raised during AEP and about 60% of those who are in the annual enrollment period feel this deep anxiety about switching health plans because of the lack of understanding of some of the particulars that make it up.

So education is number two. really have to continue with that. Number three, and this is not a marketing aha.

This is a marketing must-do multi-channel integration. As I’ve mentioned, direct mail is number one right now in terms of it has been. It’s been the stalwart of driving individuals to drive interest in a Medicare advantage plan, followed by TV being influential.

75 percent of this target market uses the internet and they look at that to educate themselves, find out more information, and basically prepare themselves as they go into the AEP. So making sure that a plan is everywhere, online, offline, in multiple ways of doing that and that includes your social media channels, your paid search and your pay to play, your TV, your OTT, your cable TV, your direct mail, your out-of-home, the more messaging that we can give beneficiaries, building up on trust and education, the better it will be for getting that individual to the next step of that enrollment funnel, once they inform themselves by actually engaging in a conversation to convert.

When we look at this group, and I’ll say 65 and above, simplicity and clarity are a must.

Seniors don’t want big words. They don’t want fancy words. They want to understand simply what a plan has What it offers and how it’s different being able to easily compare a plan comparison step-by-step benefit explanations Taking key technical jargon like MOOP and making it understandable in terms of the amount of maximum they will pay out of your pocket.

Those are the types of things that seniors are drawn to that 65 plus marketplace wants to hear because it takes away that layer of being disingenuous disingenuous and so Again, code number four being simple and being clear Five is really understanding the cost with this market drives decisions Sure, we may have a ton of great benefits to offer Supplementally, you know vision and hearing dental and fitness and food and transportation and in home type of stuff But at the end of the day this especially the older we get in the 65 plus cost is a concern you have people on fixed incomes who decide that their budget is spent a certain amount away and they’re always looking at premium costs at the top of the list.

With changes that have happened last year, the average, even though people love the zero premium, the average premium rate last year was about $17 increases in that causes individuals to want to switch.

So, being understanding that cost is a concern, premium is top of the list, deductibles and move wing heavily. They just want clear cost to benefit explanations.

So, six on the list is taking a look at health concerns. In marketing, there are a couple of averages we take.

One is aspirational. We show people doing things that we would want to be doing, we would aspire to. Sometimes there’s truth in marketing as well.

Sometimes seniors want to see active seniors, but not too active seniors. Seeing a senior skiing down a black diamond slope is not the reality for most seniors, but seeing a senior active walking looking healthy is so when we take a look at lifestyle marketing you really have to show ads that show active seniors but with real medical worries doctor networks prescription coverage chronic issues those matter to seniors and so being able to have that healthy balance between how you present your plan and how you present the image of the seniors that you’re working with so being true to that lifestyle marketing is number six

and finally I believe that local beats national and here’s why 65 plus we want to know that their plan is down the street now many of the nationals out there they are in the local markets they continue to expand county by county but they don’t have the local headquarters there in the local market they don’t have local branches in the local market local agents community-based branding personal touch, out-compete in personal call centers and broadband national ads hands down. And so for plans that are reaching a local community, whether that’s one, two, five, 10, 15 local counties, we’re in a tri-state area or such, they really need to focus on that community-based messaging.

So those are, for me, those are the seven kind of always used stalwart continuing, no matter the changes in the landscape, those are the things that I think are important for plans to put in their marketing.

Stewart Gandolf

So Doug, one of the things that you and I have talked about a lot is, and we’re going to talk about this more in a moment, the sort of traditional model of going after seniors and, you know, more ways of doing it, the interesting thing to me is that there’s, when you talk about boomers, that’s a 20-year span or something.

That’s like incredibly different. You know, the, the very beginning of that, you know, World War II had been over for a couple days.

that, you know, it’s far, far memory. and, so the culture, the environment, kids were brought up on various stages of that.

So there’s a big difference. Mars, strategist, Kathy, as you probably remember, talks about the Jones generation, which is the latter half of that cohort, which is very different.

They grew up with Scooby-Doo, not Howdy Doody. And so it’s a different kind of thing altogether. So as things evolve, I’d love to talk about, you know, the traditional that you just mentioned, what the traditional segments are, you know, TV, newspaper, radio.

But how do they do a different segments? Like, what are the different segments and how does that work for the traditional stuff?

Doug

So, you know, traditionally, and it’s a really good point, generationally, as we look at it. And, you know, as I mentioned in five years, Gen X is going to be on the table and then the millennials and Gen Z and Gen Alpha.

And I think this is the first year of Gen Beta individuals are born this year. Gen beta. you know, from a marketing standpoint, we’ve always got to be attuned to what it is that is being affected.

What is allowing people to get the message, interact with the message, engage with the company, and then take action on that.

We will continue to see shifts, especially moving into the prevalence of the digital transformation and landscape. It makes sense when you think about the end of the Joneses going into the Gen X.

These are the generations that have seen crazy, mad shifts in technology from the rotary phone to cell phones, from ovens to microwaves, from newspapers and libraries to the worldwide internet where you can find anything you can possibly want.

And so these changes into technology and digital advances surely are changing the landscape of how we market to individuals.

However, with that said, it goes really to that multiple channel approach, there are some things that are still working and we should continue doing them until they don’t work anymore.

Direct to Mail, as I’ve mentioned, is the number one right now. One of the things affecting Direct to Mail is cost.

It’s posted just 60 cents a piece. It becomes a costly channel to go through. TV, 30% mention it as really influencing their shoppers.

Each channel is vitally important. Well, we can’t forget what’s going on in the digital realm and we have to take a look at those types of things and there are a couple of different avenues.

So first and foremost, let’s take a look at those acquisition tactics. page search work, does you display ads work, does social media work?

Absolutely. 75% of this market is online. They’re looking, they’re searching, they’re trying to find information. It’s part of their whole intent in trying to educate themselves before they engage.

Now, they are not specifically the key drivers to your lead generation, but they are definitely the supporters of that lead funnel.

In fact, a great example, we took a look at direct-to-mail responders. About 50% of those end up going online to a website to get more information.

And so we look at these tactics in that multi-channel support as being able to be leveraged to get these individuals engaged.

And so when we look at, like for example, page search, the search criteria that beneficiaries are looking at: cost, premiums, deductibles, comparison plans, what is Medicare Advantage mean? What does Medicare supplement mean?

The search is out there. The education need is out there. As I mentioned earlier, education Trump sales and these are the avenues in which we can raise those questions about what you need to know to get them to respond.

When we look at some of the more traditional medias, like newspaper and radio, they are really becoming less influential.

Newspaper and radio, according to beneficiaries, about less than 10% of what actually drive them to take action. Now, there is some support, for example, running local seminars and having your seminar listings or using newspaper for your free-standing inserts to represent those listings or meetings or things you want to, but in terms of driving that actual lead, that responsible lead, the traditional radio are not doing what they used to do in the past.

You know, and when we take a look at those, one of the things in terms of that multi-channel avenue is constantly being able to, and this is the beauty of the digital channel.

If I send out a direct mail piece today, and I realize that there’s something I could capitalize on, maybe there’s a plan that’s disrupting the marketplace, they’re pulling out of the marketplace, for me to respond to that direct mail can take up to a month.

By the time I design, get my creative done approved, get a file of the CMS, and get out of the marketplace, a month could pass by.

But when I take a look at the digital environment, I can make a change. change like that. I can capitalize on something happening in the marketplace or nationally or locally or a benefit that may mean something and immediately respond to search from an individual looking to pushing it to people through social media and places like that to give that information to get them to engage.

That’s the beauty of the digital place. And then from a technology standpoint, when we look at the ability for an individual not only to go online, get educated, but also go through the whole funnel.

They can engage with an agent or broker online. can engage with the salesperson. They can move that person all the way through the enrollment funnel going through an enrollment engine and signing up for their plan.

So as I look over the next five, 10 years, I see a shift happening. I see a shift on the reliance of more technology-based interactions because you have a population that has grown up with a reliance on those.

And even now, when you look at those that are 50 and under, and how they use all the digital channels, such influence their purchase behavior, recommendation, engagement, product differentiation, we’re going see those changes. But for this year, for the next few years, stay true.

Direct mail, TV, support with your digital platforms, support it with your agent broker channels, and keep true to those channels.

Stewart Gandolf

So we’re going to talk about digital in a moment, and that’s a hot topic for a lot of the marketers we work with and we hear from.

And Doug, you mentioned new plans and it turns out Doug and I are working on a new plan that’s coming to market here shortly.

so one of the things we talk about with them a lot is the acquisition cost and what sort of the historical norms are and for the sake of time, can do this one quick, what are the kind of, what, you know, broadly speaking, what kind of targets should they be thinking about acquisition costs all in, just kind of getting an idea of what is kind of like asking the question.

Doug

How long is a piece of string because every plan is different and what I mean by that is when we take a look at an all-in cost That is that is taking a look at everything put into the development of marketing as well as the the media budgets that are used and It really depends on the plan we’re talking with if it is an established plan that has established their marketing funnels and their approach strategies And they’re messaging and they’re branding and it’s been a market for years and they have Great word of mouth and they have great brand awareness Their cost for acquisition is going to be much less than a new plan entering a marketplace in a in a sea of 34 plans I’m going raise their hand and say hey notice who I am They’re going to have to spend significantly more on some of those brand awareness building avenues in order to get that message in front of the beneficiary But if we were to you know throw all that to the wind and say what are my bookends?

You’re looking somewhere between five hundred to about fifteen hundred dollars as an all-in cost for acquisition per beneficiary Again, being very mindful of the things that could affect that, the plan size, plan position, plan product, plan benefits, and such.

But that’s a good range. you average on it, know, some of the $500 – 1,000 is good for planning purposes. And then, of course, based on a budget, you can always design your mix in how much direct mail versus TV versus digital that you’re going to use.

Stewart Gandolf

So I do want to sort of jump ahead in our discussion a little bit, because the whole digital marketing thing, you know, we talked a moment ago about generations, and there’s this supposition by a lot of, you know, old school marketers that, you know, seniors don’t come online.

And, you know, first of all, the word seniors tricky, right? We’ve written blogs about that, like, you know, whole bunch of people don’t consider themselves as senior at 70.

So, but, you know, in terms of actual behavior, the, you know, how is that, you know, where is that today?

You mentioned that, you know, most people are online, but, You know, and it’s obviously going to be an increasing part.

Is it an important part? Like tell us about, you know, paid search, paid social, other forms of electronic marketing.

Doug

Yeah, so one of the things that’s happened over time is kind of this movement. you know, I think for the most part, we are all over the our seniors too old for digital marketing.

What do you think if Steve Jobs were still alive today? He would be he would be in Medicare and you know, and we can’t underscore his contribution to the whole digital and technology landscape.

But I’d like to use an example of my own parents. And this goes back 10 years ago. My dad who just passed away recently at 91 lived on his phone.

He was an avid Amazon user. He researched everything he did online. He loved the Internet. He would print out articles.

He would send me stuff that he’d read online. He was an active user. perfect individual to be pitched, either through page search or through display or through social media.

My mom on the other hand, brilliant woman, she used to read like 10 books a week, could type 150 words a minute.

Never one day in her life went on the internet. So here you have a household with two different people on the spectrum of the digital landscape.

So from a marketers perspective, the question is, how do I market? And you do both. You make sure you’re using the traditional channels to reach my mom.

And you also use the digital channels to reach my dad, who at 91 is not too old for digital marketing.

But here’s some stats and facts. 75% of use the internet regularly. Over 70% of them are on social media with Facebook being the number one.

After seniors see non-digital TV or mail, 50% go online to check out that plan’s website. only compared to only about 20% who might actually directly call a plan or the call center directly.

In terms of the use of the different channels, let’s talk about page search. One of the beauties is the anonymity of page search.

I can go in, regardless of my understanding of Medicare, I don’t have to interact with somebody and show my ignorance.

That’s a human behavior. I can go in, I can look things up, I can get educated before I ever pick up a phone to call someone, go talk with my agent or talk to someone else.

Page search drives that. The ability to take a look at what I’m searching for on the internet and driving ads to me across a variety of different ways, making sure that the ad is hitting me with what I’m looking for and what can be found on my site, it’s paramount to a really good omnichannel strategy.

When we look at social media, it’s such a great interaction platform. I’m not stuck to a static ad, I have a dynamic ad, can use carousels, can use engagement strategies.

I can speak to a senior along this whole continuum of education to enrollment at different times within their search, and the beauty of this adding to the re-targeting.

If I come in and I’m brand new to Medicare and I’m trying to understand all the bells and whistles, features, terms and terminology, we can understand that from a digital perspective.

And I can track that person as they move through that journey so that my messaging out, whether it’s through the social channels or through page search, or even my display ads, are re-targeting that individual at different life stages in that decision journey up and to even enrollment and then beyond enrollment for individuals when they’re on a plan, being mindful of things that they might need to know, or even those that are aging into Medicare this year.

Now those that are 64, it’s actually three months before the 65th birthday to a few months after. Those are individuals who can reach through these channels.

And basically message to them and say if you are turning into Medicare, here’s what you know, and you can guide them down that whole path.

That’s how digital is really helpful in that, especially from a social media perspective and the page search.

Stewart Gandolf

That makes sense. And it’s funny, the whole aging in crowd now, if you’re thinking about 64, a whole bunch of people have jobs, they work on the Internet all day.

It’s kind of ridiculous fallacy to think they’re sitting around watching reruns on broadcast TV.

Doug

And from that standpoint, you know, that when they’re on their free time, they’re looking things up on the Internet at work.

Again, great avenue for page search and for driving retargeting.

Stewart Gandolf

Yeah. I was funny at dinner last night, was with my team, we talked about how it used to be broadcast TV kind of dictated family rhythms.

It used be the news would be at a certain time and then eight and 11 was like, you know, the TV program and now all that’s irrelevant.

You know, it’s like it’s just it’s a completely different landscape.

Doug

I would add on something in terms of the digital landscape, you know, the pushing, so to speak, getting people to whether we’re using page search or display or social media, it’s that drive.

As I mentioned, few percent will go online then or will go through to the website. But I think one of the important things that I’d be remiss if I didn’t mention is the importance the lead capture, either the landing page, the microsite or the website that they’re landing on, because I may take an individual and do the best job in the world of educating them, but if I don’t have the right pathway to engage them in the next step with a plan, then all I’ve done is educate them for a competitor.

And so really part of the whole digital, what’s beautiful about the digital world is we have the ability to create those endpoints that truly are tailored to an individual search or desire.

So the wording that we can use can match what they’re really searching for, and it gets them engaged with.

This is a company that gets me personally, that wants to solve my issue. They’re not trying to sell me, they’re trying to educate me.

And then even in that lead capture device, being able to utilize it such a way to gather information as a lead, follow up either internally or externally, depending on what type of channels are being used.

There’s a point that’s very interesting here. If you were to take a group of seniors and ask them, would you be willing to just, without any reason, give some personal information, your name, your phone number and email address, one out of two will walk away.

They’ll say, no, I can educate myself, I don’t need to give them information to a plan. However, if you add something, if you say, hey, we saw where you’re searching, we know what you like, if you provide us your name and email address, or your name and phone number, we can either send you or have somebody call you and give you a free plan comparison guide, a free Medicare education guide, a free.

I’m turning 65, what do I do next guide? When you do that, 60% of individuals will leave that information, which is then perfect for that conversion pathway towards enrollment.

Stewart Gandolf

Yeah, and that adds complexity and cost, but it also adds to efficiency, for sure. And that’s really the table stakes, right?

mean, things are harder to do. If you want to play in the big boys and the big girls, you have to be ready to do so.

Well, what are the challenges for plans offering Medicare advantage these days?

Doug

Oh, gosh, that’s a really big question. Let’s talk about couple things. The ever-changing landscape, right? As we talked about, this conversation would have been different two weeks ago.

So we never really know what’s going to happen with CMS. We have some big things happening right now. We have the CMS increase.

We have the lawsuit out there about capping broker commissions. We have a new administration coming in. that says they’re supportive of Medicare.

And so in terms of that environment, that’s hard for plans to navigate because you made your decision to based on some solid answers there.

So that’s one struggle that we have to look at. Some of the other things we need to take a look at is plan comparative, taking a look early at what can you offer your members while keeping your plan profitable that differentiates you from your competition.

We happen to be in a sea of me too. With a hundred parent companies out there offering 34 different Medicare plans, you have to have reason for somebody to look at you.

And that could be for some of the intangibles. We might have parity on premiums and deductibles and out of pockets and some of the supplemental benefits.

But where are we on customer service? Where are we on localization? Where are we on understanding the local community. Where are we on reaching out making people feel like we’re listening to them, that we’re providing coordinated care, and we’re providing services above and beyond.

That’s where these plans really need to start making differences, especially as you know, the star ratings that are out there.

The higher star ratings, the better you are perceived in some of these categories. so really working towards that approach, your current customer experience, how they’re being handled by the plan, taking care of issues that might be giving you that lower star rating, addressing those helps you down longitudinally down the line as you increase your plans.

So there are several things that plans are struggling with this year. And again, it’ll be interesting to see what happens with this rate increase, because that may actually make at least for 2026 not so much of a challenge as people were expecting in terms of gaining new members.

Now, one thing to note, last year with the losing of those 16 plans, that put about two million beneficiaries out on the marketplace.

So those are people that are having their first year experience with a new plan. Great opportunity for plans as we go to 2026 to reach out to that community of individuals to try to separate themselves from the plan they just joined.

Stewart Gandolf

Yeah, that makes a lot of sense. There are so many, you know, obviously you have compliance, which is a huge issue and from time to time we get calls from people that are out of market being penalized by being out of compliance, working with some of those and what they’re doing.

So that’s a huge issue. But I’m curious, obviously we talk about like who’s trusted in health care and it seems it’s only doctors.

mean the health plans and pharmaceuticals and hospitals these days have various levels of trust and obviously just had a horrific assassination of somebody from a health plan.

Do you find that when it comes to medical advantage like and this is a much longer question, have time for a day, like the trust factor is that you mentioned earlier, trust is important, but like that’s the sort of Paul of just mistrust of health plans in general, is that a thing?

Doug

It is, you know, just tragically what happened at the end of the year, and the effect of that, and even the backlash from that, you know, the way our country kind of split over responding to that, and it just, it tells you that this trust issue is paramount, beneficiaries want to know that the plan that they’re with, you know, they’re not looking for the plan to be a non-profit, but they’re also not looking for the plan to be, you know, hitting the top end of their value of their stock, you know, in history.

They’re looking for… plans that deliver good service, value for what they’re paying for, care for them as an individual, as a beneficiary, opportunity to make them healthier, and that goes into some of the supplemental benefits.

They’re looking for the ability to get referred. They’re looking for the ability not to get denied on their claims, and so that’s really, you know, especially in light of current events.

This year, plans really need to focus on building that trust with their potential beneficiaries, and then this is even more important, maintaining that with their existing members.

Over time, 70% of MA members will switch. They’ll turn to another plan. doesn’t mean they do this every year, but eventually 70% will go to a different plan, and that sometimes is because of better supplemental benefits or better cost scenarios.

So, this trust factor is part of that equation, and so as we go to 2026, it’s two pronged, making sure that Your acquisition focuses on trust, but also your retention measures.

Stewart Gandolf

So on that note, Doug, my experience, we’ll do a lot more to avoid pain to get pleasure.

So if I’m on a plan and I’m vaguely happy and that sort of the zone it’s hard to get me to move generally.

So do you find there’s oftentimes sort of an inciting incident where people say, okay, that’s it, I’m switching.

Doug

And if so, what is it? Well, yes, there are a couple of them. One is what’s called a plan disruption.

And that’s what a plan decides, hey, we’re not going to be in the marketplace anymore. They may withdraw from the county or they may withdraw their plan entirely.

And that’s a disruption that affects everybody. know, it’s like, as I mentioned last year, two million people had to find a new home or forced into finding a new healthcare home.

But apart from that, you know, there are things that can happen during their experience with the plan and those really have to do with their, their customer experience or member experience, communication, being able to get information that they need, making sure that there’s no confusion in what they’re being billed for and how their payments are going and how their benefits are, that kind of communication and clarity.

And then there’s one event that happens every year. They call it the ANOC shock. It’s when you get your annual notice of change where a plan tells you what they’re planning on doing in terms of your current rate, your premium due to deductables, basically the benefits of your plan and how they’re going change year over year.

for some plans who have, in the last few years, thrown a lot of money to supplemental benefits which are costly from a profitability standpoint, start pulling those back and those are introduced in that ANOC letter, that incites people to start looking.

as I mentioned earlier, 33% of seniors are going to look on the average. It may go up little bit, maybe go down, but about 33%, one out of two will look.

Every AEP, about 16% will switch.

Stewart Gandolf

We’ll actually… 60% of that 30% or 16% overall.

Doug

then overall, we’ll switch. We’ll end up choosing a different plan for whatever purpose or reason. And so those numbers may seem small, right?

But when you look at 30, you know, I think we’re predicting about 37 million final enrolled for 2020, calendar year 2025, and you take 16% of that.

That’s a lot of numbers switching back and forth. That’s a lot of profitability for a health plan. And so, shoring those up, if you know that you’re having to raise the rates, then you need to communicate to your members in such a way that they understand the value of what they’re getting for raising the rates.

If you know that a plan is raising the rates and you’ve been good in terms of your cost per member per month, and you can absorb some additional supplemental benefits, that’s a great time to start preempting with your existing members.

The good things are happening or the things that are staying in place. And then, of course, October 1, hitting hard rolling out your new benefits or your differentiations that may make you more attractive than one of your competitive plans.

Stewart Gandolf

So let’s talk about brand. So that’s a lot of churn. That’s a lot more than I think most people would expect because there’s certainly inertia is easy.

Just keep doing the same thing over and over again. But the so now then you’re talking about brand presence and how can you know brand obviously is really powerful but what can endure a lesser known plan to stand out?

Doug

Yeah, you know it’s tough. Brand matters. Absolutely, especially in a market that is overshadowed by these giants. you take the enas, the United health care of the world.

So when we look at the marketplace, there are about 100 plus parent companies. As I mentioned, they supply 4,000 plan offerings but it’s really the top 10 that dominate.

So what do these smaller plans or newer plans do? You look at providing unique extras. things like going into providing chronic care snips or other things that help those with chronic needs or better local provider networks and building those relationships.

The number one question that beneficiaries ask is, will my doctor be in my network, being able to make sure that that doctor is there, building really strong broker partnerships.

know, at the end of the day, if I’m on commission and I’ve had a long standing history with one of these big giants, and I’ve counted on that for my livelihood, and I have a new plan coming in.

It doesn’t really offer much in the differentiation in terms of their product. It’s going to be really hard for me to switch my book of business to something new. So it’s really important for plans to educate the brokers on their plan differences, why it’s easy to roll, what they’re doing for their beneficiary.

Because the one thing that brokers hate is when a one of their books of business comes in and says, Hey, I’ve been talking to XYZ company and they can offer me ABCD where the plan you put me on last year only offers A.

Why didn’t you tell me about them? Brokers hate that, you know, because it builds, again, it affects that trust relationship.

So really building strong broker relationships. We’re plans, know, really focusing on digital-first tools. And we’re in an environment where we have, you know, Medicare is going to continue and the growth as people age into Medicare.

These younger seniors are much more appreciative of digital transformation, digital use, and digital products in their everyday purchasing and approach.

So by folks on these digital first tools, they can be more nimble too. you can’t take aetna and roll out a whole new digital plan that affects all their plans without a lot of cost and a lot of time.

A smaller plan going into one or two counties or three counties. has that ability to do that in a much quicker atmosphere.

then finally, really building your community outreach, building that trust factor in your local place, doing your health fairs, your senior center events, building face-to-face credibility, being in the place that the seniors are, representing yourself not as a sales organization, but as a community supportive organization or some of the strategies that will help a brand differentiate itself from the top 10.

Stewart Gandolf

So we’ve got a couple more questions before you wrap up here. What is, we talked about that churn. We’re like, ooh, that’s a long time since breathtaking.

How expensive is that?

Doug

Well, so, you know, the value retention changes, you know, it used to be that the cost for acquisition was eight times the cost for retaining an individual, you know, and that changed every year, especially when we’re looking at the Medicare advantage community, knowing that 16% of Medicare and enrollees switch every year, just enrollment.

Cost hundreds to thousands of dollars to re-acquire that new member and so Really taking look at retention techniques being proactive in your benefit education What’s interesting when you take a look at some of the supplemental benefits

there’s lack of utilization right, so I may have been in by a Let’s say a card that gives me $200 off of over-the-counter benefits, but I don’t use it then that doesn’t become an influential benefit So being able to be proactive with your members showing them how to use key things like your dental vision Hearing perks some of the other ones like your fitness or your Or your food or some of the other supplemental perks really letting them know how to use it where do you why it’s important to them?

Checking in with brokers, you know if you have a strong relationship with your broker Keeping them engaged with your plan with updates with things are going new things growth strategies helps that broker be more informed when they’re talking and of course, you know selling is people that

So the more I’m in front of a broker, the more the broker knows me, the more he’s inclined to recommend my company, he’s talking to a beneficiary.

And then one of the things that when you look at complaints, every year CMS gets complaints from beneficiaries and some of those, some of the top complaints really around delays or denials in care.

And so taking a focus on those, are there things that we can do to bring those down to decrease the delay or increase the acceptance of referrals, because those two things will drive an individual away.

Stewart Gandolf

So by the way, Doug, sometime soon we have to do another one of these talking about marketing to the brokers rather than the patients directly because that’s a big deal.

Let’s talk about marketing research, your favorite topic or one of them anyway. How to marketing research and also compliance factors, know, or compliance, you know, sort of factor into branding success.

Doug

Sure, yeah. So, you know, the bane of an existence for every Medicare marketer is CMS oversight. But it’s important and it needs to be there.

You know, there are unscrupulous marketers out there that try to take advantage of the senior population. And so CMS being there to provide that type of oversight and approval is good.

There have been some changes, you know, in terms of the amount of time needed to to approve ads and like TV ads or things and providers.

And those are some challenges that we have to face from a compliance standpoint. But when we look specifically, know, your first question was about market research.

Market research is vital. And here’s why. It’s the voice of these beneficiaries and it’s the voice of these members where you get the true story of what’s going on. And if we reach out to beneficiaries in the marketplace and we say, hey, what are the differences between these three plans?

You’re not going to get that you’re not going to get a response where they really know the differences. If you ask about their plan and what their plan benefits are, they’re not really going to know much more than the top three things of that plan.

Even though we’ve pitched and wooed them, market research allows us to understand where those gaps are. Let’s talk about members first.

That goes back in the retention category. If I understand where the gaps in education, understanding, and use of my benefits are, the better I can in communicating that out to my beneficiaries, which means when A-Not comes around, that letter comes around, they’re more likely to stay with me.

I want to get them into that 67% of individuals that are not shopping. Market research gives us the power to find those areas where we can affect change.

Certain things aren’t going to affect change. I already have said in what my pre-moment deductible and group are going to be, but I can change some of the things that may be causing issues for my member.

Using market research for competitive benchmarking, how do I compare? If I’m a new plan or a plan that’s been around for a few years and I’m really trying to understand how I can find a niche against a larger competitor or even one of the national giants, competitive benchmarking can really help and things like focus groups, seeing down with members and asking the pure question of, you tell me, how can I, as small to medium size plan A, compete against this behemoth B?

What do you need apart from premium deductible and LOOP parity? The results that come out of that are amazing.

You will hear things that you didn’t expect to hear that affect things like the way you communicate, how you communicate, what they want to hear from you as a plan, how you engage them.

So those are just some of the ways that market research, from my perspective helps, there’s market research going on all the time through CMS.

There are surveys out there that go through member experience and things like that. Every year, star ratings come out.

The better the star ratings, this is not an aha, the better it is for all plans. Seniors interpret a star rating of four to five stars as a hallmark of quality.

So finding out where we’re not a hallmark of quality is vitally important for the plans and then you know internally you can take a look at geotargeting differences county by county differences in plan availability availability or the local networks and how they feel or things that they wish a plan would add especially in this time when taking look at supplemental benefits everybody does the me too oh this company is not offering $500 so I’m going offer $500 benefit card

well what if beneficiary start talking about a benefit that you haven’t heard about and it makes a difference maybe it’s something local or something that’s just confined to the area you’re in that’s something that a plan can look at at a cost per member per month and see if they can add it to again get those 66 percent to stay with a plan rather than look elsewhere

Stewart Gandolf

very good and final question today I know this is a very meaty podcast and thanks to our listeners who have been with us all the time but as you I think you’ll all agree that it has been fantastic in terms of being very very thorough with lots of insights on a pretty complex topic so you know we’re at the time of the year when we’re recording and releasing this podcast where a lot of M&A or Medicare Advantage plans are going to be thinking about, okay, well, the years over, we’re probably going to choose a different agency, we want to do things differently or we want to make improvements or whatever.

So what should it be doing right now to prepare for AEP, on thinking about aging and proof beneficiaries and also keeping people from that ANOC chock you mentioned too.

Doug

The first bit of wisdom is don’t delay. You need to be already working on this year’s marketing, just because there are so many things that can change.

As we know, we’re waiting on that payment structure from CMS. So already understanding, looking through optimizing your benefits messaging and where you might want to change your plan for next year being prepared for that, really segmenting your agent strategies.

How are you going to win over those 64 and, you know, and a half that are turning 65 that’ll be eligible in their initial enrollment period for seven months.

How are you getting them into that funnel, introducing them to Medicare Advantage, following them along that pathway, then getting them to enroll.

That’s a bump to your 2025 plan membership. Looking at your onboarding, we just finished a really good AEP. was a lot of growth. Some companies are already coming out and talking about, you know, they’re 16, 18, 22% growth in membership. But a critical thing happens now. All these members are on a new plan, and they need to be onboarded. Making sure your onboarding strategies are great. Communication, how they interact, being digital-friendly, addressing messaging by generation from younger boomers and Ben X when they come in to the older, and being able to provide them forms and information in the way that they like to consume it.

so making sure that you have a CMS on already is key to that. Taking a look at your retention, doing a mid-year outreach to your members to let them know how to maximize their plan, their dental visits, their free fitness programs, or supplemental benefits, engaging the brokers, and checking in with them personally, and to discuss things that might be coming up and changes with good and bad, keeping them informed.

And then again, as I mentioned, simplifying that prior authorization. And then really taking a look at analyzing last year’s AEP. Don’t wait until March, May, June, July, to look at what you did last year. Completely evaluate your channels. How did direct mail do? How did TV do? How did your seminars do? How did your digital performance? What was providing you the least cost per self-qualified lead? What was providing you the best enrollment? Really digging into those numbers, because it’s not analytics where you’re really going to find ways to adjust your marketing channel.

And then finally, being up to date on compliance and logistics, so many things are going on and changes, making sure especially if you’re a plan marketer and you are overwhelmed and you have all these things to do, really engaging in agency that understands how to market Medicare Advantage, how to market in the healthcare space, how to navigate compliance and logistics, how to think strategically and offer tactically solutions that help move the needle.

Those are things that help our health fans can be doing today to ensure that they have success in this upcoming 2026 AEP.

Stewart Gandolf

Very good, Doug, that was awesome. You did a great job as I knew you would. You can see why our clients love you so much when we bring you involved with our Medicare and Medicaid plans.

So that’s really, I have nothing to add. We covered a lot of territory we could go even deeper on most of these topics we discussed today, but I would reiterate that if you’re interested in, you know, looking into this more deeply, you know, leads our team when it comes to these kinds of things, you’d be glad to help for providing insight that you need.

So that’s great. We’ve got work to do on our clients. So I’m sure you can get back to all that, but great job.

Doug Thanks, Stuart. Thank you for having me.