This Year’s Almost Problem-Free AEP: An Aberration or the New Normal?

By James Gutman - December 16, 2015

It was the kind of Medicare Advantage Annual Election Period (AEP) that both MA marketers and plan sponsors had been waiting for after three straight years of having to negotiate through a host of complications. And the AEP that ended Dec. 7 also may be the last one without such complications for a while.

What prompted uniformly positive comments about the just-completed period to AIS from a bunch of MA sponsors and marketers were not just the results in terms of new enrollments, although they seemed to be very good. It was more the absence of any big problems, whether it be competing for attention with election campaigns and the start of insurance exchanges, or being the target of new regulatory initiatives, or having to raise premiums substantially to offset payment reductions under the Affordable Care Act.

How did the lack of “outside events” translate into pluses for MA sponsors? One big way, says Jeff Fox, president and CEO of the Gorman Health Group, LLC consulting firm, was that “acquisition costs” for getting new MA members were down substantially. He cites as examples better “response rates” to ads and marketing because there were fewer distractions — and costs of purchasing media time and space weren’t as high. In his home state of Arizona, for instance, Fox tells AIS, there were “five or six ads” for MA plans in the Sunday newspaper in the last week of the AEP, and plan-sponsor seminars for potential members pulled better nationwide than a year ago. “You can’t do this well in an election year,” he observes.

Other difference-makers this AEP, according to Fox, included more sales going through telephonically, relatively minor plan benefit changes, the lack of bad weather in sections of the country hurt by this a year ago — and a “lot better” performance for online marketing. Linda Armstrong, executive vice president of DMW Direct, a marketing firm with numerous MA clients, also cites online growth, as even ads on Facebook and Internet radio outlet Pandora got lots of responses for clients, often via smartphones — something not associated with seniors in AEPs before.

How did the AEP go for your or your partners’ MA products? How many of whatever positive changes occurred this time will be permanent as opposed to gone again next year when there will be not only a presidential election year to deal with but also perhaps a more challenging payment environment as new risk-adjustment systems start to take hold? Does this year’s relatively problem-free AEP represent a “sea change” or just a Brigadoon that comes around once every hundred years?

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