Payers should start evolving their strategies to be digital first, and streamline administration to respond to headwinds in the Medicare Advantage market, analysts for McKinsey and Company said in a July 11 report.
Demographics are changing, with the Medicare population growing older and higher risk. The program is also facing its first rate decline since 2015 and significant regulatory changes, McKinsey analysts wrote.
Payers can consider several short-term and longer-term strategies to respond to changes in the program and beneficiary preferences.
In the short-term, payers can:
- Expand reach to areas with low MA enrollment, like rural communities.
- Partner with more insurance brokers, including online sites.
- Bolster traditional outreach methods to reach more underserved communities.
- Prioritize improving or maintaining high stars ratings.
- Expand digital engagement, like chatbots, to meet members preferences for digital communication.
In the long-term, payers can evolve by:
- Reducing administrative costs to below $100 per member per month.
- Creating a seamless experience for members, from shopping to enrolling to onboarding.
- Using data to create individual and personalized member experiences.
- Investing in providers based on their member profile — for example, partnering with specialists or in-home care providers for a large population of members with kidney disease.
- Paring back supplemental benefits to focus on core medical needs for higher-risk members.
Read the full report here.