Medicare’s annual enrollment period (AEP) began on October 15 and ends next Wednesday, December 7. Millions of older Americans are now embarking on the headache-inducing process of choosing a Medicare plan. They are trying to select from among thousands of different plan options in the hope of making the right choice for their healthcare needs.
Nearly 64 million Americans today are Medicare beneficiaries, and in the coming years, the number will likely grow to encompass 20 percent of the U.S. population.
However, despite the large number of Americans using Medicare, the current system for enrolling in Medicare could not be more broken.
Systemic Medicare Issues are Longstanding But Solvable
- Most older Americans currently make their Medicare choices with a salesperson over the phone. The phone is a terrible communication setting for choosing a complex product, especially one that must align with your individual health needs and preferences. It is impersonal and a lousy medium for separating out detailed differences between alternative options; and it’s totally ill-suited for explaining the complexities associated with Medicare.
- The situation is made worse by the salespeople themselves who make calls and answer the phones when older Americans respond to Medicare ads.
Medicare salespeople are incentivized to sell specific plans, not to help older Americans find the right plan for their own distinct needs. These salespeople are often undertrained, seasonal employees who want to secure the sale as fast as possible to generate more sales, which results in rampant mis-selling. Even if they wanted to select the most applicable plan for beneficiaries, it would be impossible for those salespeople to master the thousands of plans available with the thousands of different options within them.
- Since this entire process is conducted over the phone, older Americans must share extremely sensitive personal information – such as Medicare IDs – with these undertrained and often temporary workers, putting their personal data at increased potential risk of loss.
All of these reasons beg the question: why, in 2022, with numerous ways to streamline the process to make it easier for beneficiaries and carriers, are we still enrolling folks in Medicare like it’s 1989?
Evaluating Medicare’s Positioning in Today’s World
I came to work in health insurance having spent much of my career in property & casualty (P&C) insurance. At the time, I thought P&C was backward from a technology standpoint. But if P&C was a decade behind the cutting edge in technology, Medicare is a further 10 years behind that.
The result of this horrible distribution model is that, according to a 2021 Medicare literacy survey, a widespread lack of knowledge exists among beneficiaries when it comes to basic Medicare terms and available benefits. Three out of four Medicare beneficiaries from the survey described the program as “confusing and difficult to understand,” while half did not even know when the AEP began.
So, if the current system of selling plans via the phone is leading to general misunderstanding and frustrations, what can be done?
One answer might be regulation. Recent legislation – the Inflation Reduction Act, in particular – does address some longstanding issues that have plagued the Medicare system as a whole. Particularly, the act requires the federal government to negotiate prices for some high-cost drugs covered under Medicare. But this is not enough, seeing as many of the provisions under the Inflation Reduction Act that would lower out-of-pocket spending for Medicare beneficiaries do not actually come into effect until 2026. In a broader sense, we cannot expect legislation alone to fix other major issues, such as efficiency. For example, although Medicare premiums for Part B (the part of Original Medicare that covers doctor’s visits and outpatient care) are declining, other parts of Medicare are simultaneously becoming more expensive, resulting in overall costs actually increasing for beneficiaries.
Medicare Needs to Digitize for the New Generation of Older Americans
Medicare needs to catch up with other industries and embrace technology to help Medicare recipients now. Older Americans want more plan choices with options that better suit their lifestyles and an easier enrollment process. And today’s older Americans are not what stereotypes would cast them out to be. Gone are the days when older Americans need the help of their grandchildren to even find the internet browser on their computer. Most Medicare beneficiaries today know how to navigate the internet, and many welcome new technological advancements: over 76 percent of older Americans noted they are comfortable using the internet to choose their Medicare plans.
Online-based platforms can start making the enrollment process more efficient by allowing older Americans to take ownership over their Medicare plan selections. These tools, like the platform we built, Hella Health, can also serve as truly independent advisors. We provide older Americans with the relevant facts and costs upfront, so they are free to make an educated decision – instead of being pressured to pick a plan over the telephone. Digital platforms can empower people to make a choice that works for their particular situation among countless options.
Medicare enrollment should not be a nightmare. We spend $696 billion on Medicare – so reforming the existing plan distribution model couldn’t be more vital. The process should be as straightforward and stress-free as possible, and that way is through embracing technology.