How Humana, UnitedHealth won Medicare Advantage market share in 2023

Revamped marketing strategies separated the lions from the house cats during 2023 Medicare Advantage open enrollment.

Industry giants UnitedHealthcare and Humana dominated the private Medicare market for the current plan year, capturing more than 70% of new enrollees and far outpacing the average industry growth rate of 7%. These leading insurers strengthened their positions by adapting to new regulatory and marketplace realities.

In addition to offering popular supplementary benefits such as dental care, over-the-counter allowances and healthy food assistance, top insurance companies fine-tuned their marketing tactics to stand out in the increasingly crowded, commoditized and regulated market, said Brad Ellis, senior director at Fitch Ratings.

The average beneficiary had 43 Medicare Advantage plans from which to choose, and a record 66% of Medicare Advantage plans with prescription drug coverage charged no premiums, according to the Kaiser Family Foundation. “There’s been some commoditization of the Medicare Advantage benefits, so it really comes down to price and to marketing,” Ellis said. “There’s only so many bells and whistles you can add.”

Insurers’ heightened focus on consumer outreach strategies coincided with a fedreral crackdown on Medicare Advantage marketing led by the Centers for Medicare and Medicaid Services.

“CMS really pushed through several different regulatory restrictions, or requirements, quite late into the annual enrollment period, and really required a lot of that content to end up not making it out into the marketplace,” said Scott Fidel, managing director at the financial services firm Stephens Inc.. “CMS substantially slowed the direct-to-consumer via TV sales trend, relative to prior years, and that benefited certain carriers, and was negative for others.”

In an effort to curb rising consumer complaints, CMS this year declared that insurers are responsible for the conduct of every entity that interacts with customers before, during and after enrollment—even if a carrier is not contracted with a marketer that breaks the rules.

CMS also increased how much member satisfaction counts toward insurers’ star ratings, which provide Medicare Advantage insurers with the extra funds they need to offer generous benefits and that brokers use as a marker of quality. A heightened focus on the shopping experience led insurers to rethink relationships with direct-to-consumer call centers and slowed Medicare Advantage growth.

“The Joe Namaths were a lot less present on the TV this year because those large sales aggregating organizations, they dropped their TV advertising by somewhere close to 70%,” said George Renaudin, Humana’s president of Medicare and Medicaid. “When you add that up, I think having the growth rate slow isn’t necessarily a shock,” he said. (Namath is a retired professional football player who was a spokesperson for Medicare Coverage Helpline, a brokerage.)

Humana reasserted itself after missing enrollment targets for the 2022 plan year spurred a $1 billion investment into Medicare Advantage and expanded distribution channels. The effort paid off: Humana, the second-largest Medicare Advantage carrier with 5.5 million enrollees, and signed up 463,100 new members, nearly 23% of the total for this year, according to federal data released last month.

The insurer raised compensation to third-party marketers such as GoHealth to equal what rivals offer, Renaudin said. But there was a caveat. Humana, like other insurers, asked brokers to pitch patients on the overall value of its benefits packages rather than merely emphasizing a specific feature, such as dental coverage. The insurer also gave bonuses to sellers who reduced the number of customers switching in and out of plans over the course of open enrollment.

“We weren’t just matching the competitors. We targeted how we were doing so in a way to improve the quality of the sale, which translates to better retention,” Renaudin said.

Blue Cross Blue Shield of Michigan likewise credited its 9% Medicare Advantage growth to more robust marketing. The company’s internal numbers differ from CMS’ report. Several insurers noted discrepancies and said CMS fell behind on cataloging enrollment data. CMS said its files lag by a month but reflect what insurers submit.

The COVID-19 pandemic heightened the importance of TV advertising but, rather than rely on outside marketers to promote its products, the Blues carrier’s in-house marketers debuted a 30-minute infomercial highlighting plan benefits, said Rick Notter, vice president of individual business. The nonprofit insurer also boosted digital ad spending and placed spots on platforms such as Spotify, he said. Blue Cross Blue Shield of Michigan monitored how many leads each digital channel generated weekly and used those data to adjust marketing spending in real-time, he said.

“Each year, it’s test and learn. The nice thing about digital marketing is that you can make changes almost on the fly,” Notter said. “You can almost change on a week-by-week or a day-by-day basis, depending on the results you’re getting.”

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