How Medicare Advantage Plans Can Increase Consumer Satisfaction

Medicare Advantage plans are more likely to achieve high satisfaction scores when they offer a consistent product message and brand experience and have control over the delivery of care, according to a J.D. Power study. Members frequently choose a plan they understand and find easy to work with. The study measures member satisfaction with Medicare Advantage plans based on six factors in order of importance: coverage and benefits (26%); customer service (20%); provider choice (15%); cost (14%); information and communication (13%); and claims processing (13%).

Improving communications with enrollees is one of the greatest opportunities for health plans to improve member satisfaction. It’s the only factor in the study that has not seen a significant improvement in member satisfaction. Valerie Monet, director of the insurance practice at J.D. Power, said that many plans have multiple product design features and come with technical manuals that are 20 pages or longer. Expecting members to be experts on these services and benefits is a losing battle for the plan and the member. Members expect their plan to provide guidance, ranging from assistance in selecting a doctor to helping them understand prescription costs.

Forty-eight percent of members agree strongly that their health plan is a trusted partner in their health and wellness, which increases satisfaction by 166 points. Satisfaction is 136 points higher among the 89% of members who completely understand how to find a doctor under the plan. Satisfaction is 110 points higher among the 88% of members who say their doctor spends the right amount of time with them.

Members expect immediate attention or advice when they call their health plan provider. Forty-one percent of those who called their plan had to give the same information more than once to get their issue resolved. Only 35% of members said that customer service provided all of the information they needed on the costs of prescription medications. Ninety-one percent of customers who are delighted with their Medicare Advantage plan (satisfaction scores of 901 or higher), say they will definitely renew their policy, and 89% will definitely recommend their plan to family and friends. Loyalty drops to 71% and advocacy to 66% among members who are pleased with their plan (scores of 751-900). Plans garnered the following member-satisfaction scores:

  • Kaiser Permanente 851
  • Highmark 791
  • Humana 782
  • UnitedHealthcare 775
  • Cigna 774
  • Aetna 773
  • Anthem 765
  • Health Net 756
  • WellCare 742

In 2016, members reported an average increase of $117 in annual premiums to $1,497. They also have more out-of-pocket expenses. On average, member deductibles are $1,705 in 2016, a $310 jump from 2015. Satisfaction is 136 points higher when members completely understand their out-of-pocket costs. Monet said that members are more satisfied and see the value of their plan when they have a better understanding of how much they are paying and what the costs cover.” For more information visit http://www.jdpower.com/resource/us-medicare-advantage-study.

Making the Most Out of Open Enrollment

OpenEnrollment

Nearly half of employees are stressed by the open enrollment process and only half are confident about the benefit decisions they made last year, according to a study by MetLife. Millennials are the most stressed and confused. When asked about the most effective benefit resources, respondents ranked one-on-consultations well above other resources. In fact, Millennials led their generational counterparts in valuing one-on-one consultations. However, only half of employers offer one-on-one consultations. Sixty percent of Millenials consult with their families and friends on benefits. MetLife says that employers need to help their employees connect the value of non-medical benefits to their day-to-day lives. Employers should also do the following:

  • Make sure that employees fully understand key terms such as “deductible,” “premium,” “PPO,” and “HMO.”
  • Have employees ask themselves, “Do I have a big life event coming up, such as marriage or retirement?” It’s critical to choose benefits based on present and future needs.
  • Make sure that employees review their benefits and fully understand them. Only half of employees said they thoroughly reviewed their benefits choices last year.

The survey also reveals how employees feel about their benefits:

  • Financial uncertainty: In contrast to decreasing unemployment numbers, American workers remain pessimistic about their financial future. Less than half feel in control of their finances. Even fewer expect their situations to improve in the next year (46% in 2015, compared to 52% in 2014). More than half are concerned about having enough money to cover out-of-pocket medical costs as well as meeting monthly living expenses and financial obligations. These worries that have increased every year since 2012.
  • Job Satisfaction: More than half of employees are satisfied with their jobs and are committed to the organizations’ goals. An increasing number plan to be with their companies a year from now.
  • Financial Benefits: 71% of employees consider work to be the foundation of their financial safety net. Sixty-two percent of employees want more financial security benefits. Millennials are more financially vulnerable compared to their counterparts. Gen Xrs say they are less secure than other generations.
  • Appreciation of benefits: Half of employees agree strongly that their benefits help them worry less about unexpected health and financial issues. Seventy percent of employees say that having customizable benefits would increase their loyalty to their employer.
  • Supplemental benefits: Employees continue to ask for a range of solutions, especially for more common benefits, such as medical, prescription, 401(k), dental, life, and vision care. Employers are keeping pace with many of their employees’ top benefit requests. However, there are large gaps in accident insurance, critical illness, and hospital indemnity. Most employers understand how non-medical benefits can provide financial protection, such as offsetting out-of-pocket medical expenses. Yet, only 47% of employees believe that supplemental health benefits can help close these gaps.
  • A streamlined plan design: Plan design, claims management, and implementation rank highly as advantages of streamlining the number of carriers that employers use.
  • Use of enrollment firms: Three-quarters of employers have positive attitudes towards enrollment firms. Seventy-one percent of employers say that working with an enrollment firm helped them improve benefit communications.
  • Wellness plans: More than two thirds of employees are interested in physical well-being programs that reward healthy behavior. This is especially true among Millennials (75%) and female employees (72%).
  • Retirement Benefits: Forty percent of employees say that having retiree benefits is a key reason to stay with their employer. Millennials feel the most strongly about this, probably due to their lack of financial confidence. About a third of employees plan to postpone retirement, an increase of 5% over 2015. Almost 6 in 10 employees plan to work or consult once retired. Of this 60%, 44% plan to work part-time.
  • Older workers: With today’s workers redefining what it means to be a retiree, employers must also redefine what retiree benefits look like in order to appeal to this rich reservoir of talent. For example, 63% of employees say that dental is a must-have retiree benefit while only 42% of employers offer it. Similar gaps can be found across other critical non-medical benefits, such as vision and life insurance. More than half of employees say that their employer does not offer any employer-paid non-medical benefits. With retiree benefits being such an important loyalty factor for many employees, employers have an opportunity to keep pace in 2016 and beyond.

Benefit Trends Around the Globe

Employers around the world are concerned about finding and retaining skilled talent, according to a MetLife study. Recruiting is a challenge for more than half of employers, including 69% in India, 66% in China, 54% in Poland and, 53% in the United Arab Emirates. Talent shortages are a concern in Russia, China Poland, UK, United Arab Emirates, and India. Employers in countries that don’t have as much of a talent crunch have different staffing problems. For example, only 8% of Egyptian employers say they’re affected by a talent shortage, but 37% of workers say they would like to be working elsewhere within a year.

Nearly one-third of workers say that a better benefit package could persuade them to stay with their employer, including 58% in China, 57% in the UK, 53% in the United Arab Emirates, and 51% in India. In fact, 47% of Egyptian workers who are looking to change jobs in the next year said that a better benefit package would be a reason to stay. It’s the second most important motivator. Benefits are an even bigger recruitment and retention tool for multi-national companies operating in developing markets:

  • India – A larger percentage of multi-national companies think highly of benefits, such as health, life and accidental insurance and financial planning compared to non-multi-national companies, with 88% of all Indian employers surveyed saying they provided benefit offerings to attract workers away from competitors.
  • Russia – Seventy-seven percent of workers from multi-national companies say they value their benefits, versus 58% of workers from non-multi-national companies.
  • Egypt – The promise of better benefits is as important as a higher salary is for workers in multi-national companies.

Maria Morris of MetLife Global Employee Benefits said, “As demand for employee benefits grows, we’ll see more and more local companies implementing total rewards packages.” Voluntary benefits are growing rapidly in the U.S. and around the world, says Morris. Fifty-five percent of workers want their employer to provide more non-medical benefits to purchase and pay for on their own. Similar to the U.S. results, nearly 50% of all workers where the study is conducted are seeking a wider array of voluntary benefits, except in Australia and the UK. Eighty-three percent of employers who offer voluntary benefits do so because it’s cost effective, and 64% do so because it is convenient. “Particularly for voluntary benefits like life insurance, we’ve seen a lot of interest coming from employers for more coverage, which has been driven by employee demand,” says Hemant Khera at PNB MetLife India. In response to this demand, MetLife created an online portal for voluntary life insurance products, which launched in the spring of 2016 and has enjoyed initial success.

More Americans Seek Guaranteed Income in Retirement

To address inflation risks, many Americans want financial products that provide guaranteed income in retirement as well as opportunity for increasing income, according to a study by Allianz Life. Eighty percent are interested in a product that offers income for life, and 86% are interested in a product that offers guaranteed income for life plus the opportunity for income to increase over time.

Seventy-seven percent prefer a guaranteed income option that has a lower income rate, but offers the possibility of increases, over one that has a higher starting income rate with no opportunity to increase. Fifty percent say that it’s very or extremely important for a product to offer the possibility of income increases. Allianz Life vice president of Consumer Insights Katie Libbe said, “Many people depend on an annual pay raise to cover various increasing expenses, and build long-term savings. Consumers facing retirement will need to explore options that create a similar income strategy by using a portion of their portfolio to get guaranteed income for life with the chance for increases.” Annual pay increases are an important part of maintaining financial security for many Americans. In fact, 67% say they got a pay raise at least half of the time during their working years. Yet, if faced with a frozen income that offered no chance for an increase in annual salary, 53% say they would be very worried or even panicked as to how they would pay for everyday expenses.

Twenty-eight percent of those surveyed (41% of people earning less than $50,000) worry that they won’t be able to pay for basic needs, such as housing, food, and medical care. Considering the critical role of pay raises in managing rising costs, this scenario provides a glimpse into the situation of retirees who are on a fixed income. Libbe said, “Clearly, there is strong consumer appetite for guaranteed income and increasing income solutions in retirement. It’s important that these benefits are available so Americans can have more confidence in their ability to manage rising costs when pay increases are no longer an option.”

Recent research on Allianz Life annuities reveals that income benefits – built-in or through an optional rider at an additional cost – have delivered income increases to many customers. Income from Allianz Life fixed index annuities has helped address inflation. Purchasing power actually increased over time. Ninety-three percent of clients who are receiving income from these fixed index annuities got an increase. Sixty-seven percent of these clients got a payment increase every year

Early Alzheimer’s Treatment Saves Medical Costs

Alzheimer’s patients who received medication for the disease ended up costing the health system less and had lower mortality rates, according to a study presented the Alzheimer’s Association International Conference (AAIC) in Toronto last week. “Even with today’s first-generation therapies, early Alzheimer’s treatment has significant potential to benefit the individual with the disease as well as the economy,” said Maria Carrillo, PhD, chief science officer, Alzheimer’s Assn. Christopher Black from Merck said, “Since Alzheimer’s is incurable and progressive, some assume that treating dementia is an unjustified cost drain on our healthcare system, but this study presents compelling arguments for prescribing the standard of care.”

Average health care costs more than tripled in the month after an Alzheimer’s diagnosis. But those receiving an Alzheimer’s treatment had lower health care costs in the month after they were diagnosed compared to those who did not receive a treatment ($5,535 versus $6,711). Though people who initiated taking medications had higher pharmacy costs, their total health expenditure was less than the people who did not take approved medications ($2,207 vs. $2,349 per patient per month).

Medical Marijuana Reduces Medicare Part D Drugs Costs

 BY  IN INSURANCE INSIDER NEWSLETTER

medical marijuana

Medical marijuana saves state and federal governments millions of dollars on Medicare. For example, prescriptions for painkillers have dipped drastically in states where medical marijuana is available, according to a Univ. of Georgia study published in the July issue of Health Affairs. Researchers combed through data on all prescriptions filled by Medicare Part D enrollees from 2010 to 2013 for a total of over 87 million physician-drug-year observations. In medical marijuana–approved states, the average doctor prescribed fewer doses of antidepressants as well as seizure and anti-nausea medication. Researchers narrowed the results to conditions for which marijuana may be an alternative treatment, selecting nine categories in which the Food and Drug Administration had already approved at least one medication: anxiety, depression, glaucoma, nausea, pain, psychosis, seizures, sleep disorders, and spasticity.

In 2013, Medicare saved $165.2 million in lower prescription drug use when 17 states and the District of Columbia implemented medical marijuana laws. The results suggest that if all states had implemented medical marijuana, Medicare would have saved about $468 million. “The results suggest people are really using marijuana as medicine and not just using it for recreational purposes,” said study author Ashley Bradford.

The next study will look at medical marijuana’s effects on Medicaid. Researchers expect the cost savings to be repeated, saying their findings suggests that more widespread state approval of medical marijuana could provide modest budgetary relief.

Wellness Plans & Smokers

Sixty-six percent of consumers in wellness programs say their program does not include a medical test for nicotine use, according to HealthMine study. Also, 66% of wellness programs don’t offer financial incentives to quit smoking. More than half of smokers lie on health forms, according to CDC data. The survey also reveals the following about employees in a wellness program:

  • 57% say their program does not offer a smoking cessation program.
  • 34% say their program does offer an incentive to quit smoking.
  • 48% say that colleagues who smoke should pay a penalty or premium.
  • 32% say they have smoked within the past two years, and 11% have participated in a smoking cessation program through their wellness plan.
  • 80% say they probably wouldn’t complete a smoking cessation program without a financial incentive.

The Costliest Medical Conditions

Sun Life Financial studied the costliest medical conditions covered by its stop-loss insurance from 2012 to 2015. During the four years of the study, billed charges from medical care providers totaled $9 billion. Self-insured employers paid just over half ($5.3 billion) of those billed charges after discounts were applied and received $2.3 billion in reimbursements through stop-loss protection.

Million-dollar-plus claims increased 25% compared to the previous year. Less than 2% of million-dollar plus claimants (448) account for 18.5% of stop-loss claims reimbursements ($431.2 million). The average amount an employer paid on a claim above $1 million was $1.45 million, which was reduced to $491,000 after applying the average stop-loss claim reimbursement ($962,000).

Cancer dominates the top of the list (number one and number two) with $618 million in stop-loss reimbursements, accounting for 26.6% of stop-loss claims. Breast cancer accounted for 13.6% of cancer reimbursements. Cancer is also a leading million-dollar condition; it’s in the number-two spot after premature infant and live-born complications. The use of Intravenous medications was a key driver of rising cancer costs in 2015.

Chronic/end-stage renal disease (kidneys) held steady at number-three, accounting for over $369 million in combined first-dollar claims and stop-loss claims reimbursements. The average treatment cost for claims associated with kidney disease has gone down 21% over the last four years, the high incidence rate of the condition contributes to its ranking. One in three Americans is at risk for kidney disease, with diabetes and hypertension as leading causes.

Transplants were number-six with a 65% increase in incidence from 2012 to 2015. There has been an expanded use of transplants and an increase in organ donations and improved procedures, which can increase the pool of transplant candidates. Transplants represented over $62.2 million in stop-loss claims. There was a 79% increase in bone marrow/stem cell transplant costs and a 55% increase in associated pre- and post-transplant costs. The costs to treat a catastrophic condition were higher in certain regions of the United States: 27% higher in East South Central, 22% higher in the Mid-Atlantic, and 19% higher in the Pacific regions.

How Far Are Adult Kids Willing to Go to Help Aging Parents?

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A study by Fidelity Investments reveals that adult children have their parents’ backs and far more than parents may think, although 93% of parents say it would be unacceptable to become financially dependent on their children; only 30% of children feel the same. Nearly four in 10 families disagree as to roles and responsibilities as parents get older. Among the other communication gaps:

  • 92% of parents expect one of their children to assume the role of executor of the estate, but 27% of the kids who are expected to be the executor don’t know that they are expected to do so. Fifty-five percent of parents expect the oldest child to be executor.
  • While 72% of parents expect one of their children will assume long-term caregiver responsibilities in retirement if need be, 40% of the kids identified as filling this role didn’t know this. Of those that do, 58% are women. One surprising trend is that a growing number of Millennials are providing care giving support for a parent.
  • While 69% of parents expect one of their children to help manage their investments and retirement finances, 36% of the kids identified as filling this role didn’t know this.

John Sweeney, executive vice president of Retirement and Investing Strategies at Fidelity said, “Many families need to do a better job of being on the same page when it comes to financial planning, as there are real emotional and financial consequences when family conversations don’t happen or lack sufficient depth. At some point every family will face issues related to aging, which is why it’s important to take the time to sort through the details related to care giving responsibilities and estate planning, before declining health forces the issue. Doing so can lead to far better emotional and financial outcomes for everyone.”

Why aren’t these conversations taking place? Part of it seems to be a matter of timing, since only 33% of parents and their children agree when it’s appropriate to initiate these conversations; that is, whether to have them well before retirement, upon entering retirement or closer to when health and finances become an issue. Part of it may be that families don’t realize the importance of talking these topics through: a significant portion of those surveyed have yet to discuss retirement plans (38% of parents, 43% of adult children) say it’s because the subject never comes up! Even if conversations are taking place, the depth and extent of the conversations is often inadequate, as the study uncovered significant gaps in the following areas:

  • Long-term care: 43% of parents say they have not had detailed conversations with family members about long-term care and elder care. An additional 23% have not had any conversations at all. While 72% of children think their parents should be tackling the issue of long-term care/elder care, only 41% of their parents say they actually are. As healthcare costs have risen in the past few years, this has become an increasingly important topic. According to the latest Fidelity Investments Retirement Health Care Cost Estimate, the average couple can expect to spend an estimated $245,000 on health care throughout retirement.
  • Will and estate planning: Sixty-nine percent of parents say they’ve had detailed conversations with their children on this subject, 52% of children say they haven’t.
  • Living expenses in retirement: Thirty-four percent of parents say they have not had detailed conversations with family members about covering their living expenses in retirement. An additional 16% have not had any conversations on the topic at all.
  • Shelter from the Storm: With conversation comes greater peace-of-mind.

One thing is certainly clear: having detailed conversations around finances can help families avoid panic when it matters most. In fact, 93% of children who say they have had any detailed conversation with their parents are significantly more likely to have greater peace-of-mind around these issues. Likewise, 95% of parents reported feeling greater peace of mind as a result of estate planning conversations.

One-third of parents and their children say frank conversations should occur after retirement and when health and finances have become an issue—at which point, it may be too late. These conversations should begin taking place before retirement, and certainly well before any challenges arise. “It’s actually a good idea for conversations about finances to be taking place among families no matter what your age, whether you are in your twenties and looking to build a strong financial foundation or in your sixties and transitioning into retirement,” added Sweeney.

Ask as many detailed questions as you can. Don’t be afraid to ask even the most seemingly obvious questions. Three out of 10 families surveyed disagreed as to whether or not the children knew where to find important family documents such as wills, power of attorney and health care proxies. (For those looking for a safe, electronic storage location, Fidelity recently introduced FidSafe®, a secure digital place to store, access and share all of a families’ most important documents.)

When having discussions, follow the “voice not vote” rule. While family members should have a role in the planning process, make sure the ultimate decisions made are consistent with the wishes of the parents, who are charting the course of the rest of their lives. If a financial advisor is already involved in planning, having these discussions with the advisor can be a good place to start.

Define family roles. Advanced planning can help define roles and choose when and how different people will be involved. For example, who will have power of attorney or be the executor of your estate? It’s important to consider the personalities of each child, as well as their proximity, relationship with parents and other nuances that play into long-term decision making.

Commit to follow-up conversations to keep the dialogue going. These conversations are not “one and done.” Keep the momentum going and schedule as many get-togethers as needed—and revisit those plans at least annually, to make sure they still make sense.

Study Shows That Private Exchanges Help Retain Employees

Seventy-two percent of employees using a private exchange say they are more likely to remain with their employer because of their benefit program, according to a new Liazon survey. The survey findings suggest that retention can get a boost from increased engagement and awareness of benefits, including a better understanding of their value in total compensation package. Ashok Subramanian of Liazon said, “The retention case is incredibly strong for private exchanges. The data show us that employees appreciate their benefits more when they are engaged in the process of selection and view the full cost of their plans. As private exchanges become a more popular form of benefit delivery, employers are beginning to recognize the model as a way to communicate the value of the benefits they are offering to their workforce.”

When asked to compare their experience using an exchange to the traditional method of benefit distribution, 83% of employees said they are more engaged in their health care decisions and 77% said they value their benefits more. Further, by increasing transparency into employer contributions and the full cost of benefits, private exchanges help employees better understand and appreciate their benefits as part of their compensation. In fact, 85% of respondents using an exchange, for the first time, said that they are more aware of their company’s contribution to their benefit costs and 81% said they value their company’s contribution more.

Last Updated 12/06/2017

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