Medicare:
Medicare Advantage HMOs
Oct 25, 2006
Insider Analysis
HealthLeaders-InterStudy
Insurers Go Retail In Medicare Push
By Roy Moore
Looking to
pad their Medicare beneficiary rolls nationally, insurers are returning
to the fight for Medicare enrollees with an approach that is distinctly
local.
Teaming
with retailers, the carriers see the federal Medicare program as a
consumer business that requires one-to-one retail sales between agents
and potential beneficiaries.
Based on
the successes of last year, many carriers are returning to the retail
route to push their Medicare offerings in the upcoming open enrollment
period. The companies are characterizing the moves as part of their
multi-pronged focus on getting seniors into their plans.
Perhaps the
most successful retail/insurance partnership was last year's deal
between Humana Inc. and Wal-Mart Stores. In that partnership, Humana
established workstations at Wal-Mart locations, where an in-store agent
explained the program to seniors. That model resulted in more than
850,000 eligible seniors enrolling at Wal-Mart stores, the retailer said
this summer.
As the open
enrollment period for 2007 approaches, carriers are returning to the
retail model. WellPoint Inc. signed a partnership with CVS pharmacy to
educate seniors on the benefits of Part D. The deal covers more than
5,800 CVS/pharmacy stores in 43 states, where WellPoint will provide an
educational booklet called Making Sense of Medicare Part D. At some
stores, WellPoint will also provide an agent to discuss the company's
Medicare products.
Spokesman
James Kappel - who declined to give enrollment projections, saying it's
still too early - said the deals offer an important avenue for
individuals who are looking for information. "It's one of several
approaches. You can't just look at one approach and say that's going to
capture the entire market," he said.
The CVS
deal followed a similar one with Walgreen's last year that hasn't been
renewed, but Kappel said the company is open to partnerships with other
companies.
Health Net
Takes Different Route
Unlike
Humana, Health Net Inc. wasn't blessed with a strong retail ally who
could feed enrollees into its plan. Instead, the insurer set about
developing its own retail locations to push its Medicare products.
"That's a
huge marketing advantage [for Humana] and obviously Health Net doesn't
have the numbers that the other plans have and they need to be
innovative in how they go after the market," said Anthony Cirillo, head
of Fast Forward Consulting in Huntersville, N.C.
In April,
Health Net opened a 2,500-square-foot Medicare store in Arizona,
following its earlier development of a retail location for East Los
Angeles. There the insurer wanted to reach beneficiaries qualified for
special needs plans, a group that includes those dually eligible for
Medicare and Medicaid as well as those institutionalized or suffering
from chronic conditions. The California center has evolved into offering
service and information to Hispanic beneficiaries in that community.
That same
model was taken to the senior population in Mesa, Ariz., where 14
percent of the population is over 65, according to U.S. Census data. The
first of these Medicare stores opened in April at a mall used by many of
the area's seniors. Susan McLeod, a spokeswoman for Health Net of
Arizona, calls it a strategy of marketing the company's services closer
to the customer.
Health Net
officials say Arizona's arid weather makes it difficult for seniors to
exercise outside, creating a group of mall walkers who do their daily
exercise walking inside of malls. Health Net is targeting those seniors
who visit the mall and want face-to-face time with plan representatives
and seminars. McLeod said the experience varies from senior to senior.
Some come in knowing what plan they want and can be signed up in five
minutes. Others need more information and can take an hour or more or
even multiple trips.
"A lot of
seniors walk in that mall every morning," McLeod said. "We feel it's an
environment that's on their terms. No one is going to their homes. They
ask the questions they want and it's a very comfortable atmosphere."
The concept
resembles that of the cellular industry, which operates retail locations
in high-traffic areas like malls and shopping centers. Just as with
Health Net's approach, customers can come in and view the product with a
sales representative and sign up for a plan.
Cirillo,
who earlier worked for a medical management company that offered
Medicare+Choice plans from Health Net , believes the mall strategy is a
good one to foster a relationship between the carrier and seniors, which
could then lead to plan sales.
"A lot of
time you sell the policy and you never hear from anybody again. In this
day and age of viral marketing, I don't think you can skimp on bad
customer service without getting caught anymore. If they keep these
things open after the enrolment period and use it as a service center,
that would go a long way to retaining customers," Cirillo said.
Instead,
these stores invite seniors who like to chat and have their Medicare
questions answered, particularly regarding issues like gap coverage. By
keeping the store open year round, Cirillo believes Health Net can build
relationships with the senior population and the aging Boomers,
potentially leading to sales in future years.
Health Net
wants to expand the retail-based concept to other locations by the end
of 2007, but Gothelf declined to say where it would put any new stores.
She said that the company will look at markets where it can add value
and support to beneficiaries.
OUTLOOK:
Health Net and other carriers are wise to go where their potential
clients are, and outlets like the Medicare store can help build brand
identity. But unlike the cellular industry, which has used a retail
store model, health plans have a limited time period to convert seniors
over to their plans. This gives Health Net just a short time to sign up
seniors in a given year. However, if the company can use the stores as
an effective marketing tool, Health Net could build brand loyalty and
add seniors long term.
