Deft Research’s new Age-in Study takes a deep dive into how the global pandemic recession has affected consumers as they move from commercial group or Affordable Care Act coverage into Medicare.
The 2020 Age-In Study, the fifth study in Deft’s six-part Senior Market Insights Service this year, surveyed more than 2,200 Age-Ins and Late-to-Medicare eligibles to examine how the recession has altered retirement plans by senior segments; recent shifts in product preference; the ideal timing of new-to-Medicare campaigns; how Age-Ins prefer to connect with sales agents in the post-COVID world; and how carriers can best convert their current commercial members into new Medicare coverage.
In an executive summary, George Dippel, senior VP client services, looks at two points from the report: the impact of COVID on product preference and the timing of Age-In campaigns.
The tried and true marketing strategy for “turning 65” (T65) campaigns was upended in the wake of COVID-19. Up until then, many people planned to delay retirement and work beyond the age of 65. But suddenly the outbreak forced businesses to close and these seniors faced furloughs and layoffs. Indeed, the national shutdown caused unemployment rates to soar from 3.6 percent to more than 14 percent, with 1.4 million workers aged 60- to 64-years-old now out of work. The unemployment risk for those nearest in age to Medicare enrollment skyrocketed to 11.7 percent. “Despite improvements in the June unemployment data, this recession has been a humdinger on the nation’s oldest workers. If not for the unprecedented level of stimulus pumped into the economy via the CARES Act, we would have several years of Age-Ins sputtering into their Medicare IEPs with their financial tanks running on fumes,” Dippel wrote in the summary.
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Once the extra $600 a week in unemployment benefits comes to an end, these seniors may have to reset their expectations for retirement and determine what type of Medicare coverage they can afford. Some may have no choice but to retire on time. Others—those who are still working but have lost investment income or assets—may plan to retire even later so they have time to build up their nest egg again. This means Medicare marketing professionals must adjust T65 collateral schedules to meet the needs of both groups. From a product perspective, the downturn in the economy may dampen seniors’ willingness to spend money on Medicare coverage. The Deft Research indicates that more Age-Ins are skewing toward Medicare Advantage compared to MedSupp or Original Medicare Only.
Until recently, Age-In product preference between Medicare Advantage and MedSupp was basically 50-50, according to Dippel. “With an 11-point gap favoring MA, the elimination of first dollar MedSupp coverage, and the prospects of future MedSupp rate increases in a post-MACRA world, Age-In product preference may be permanently impacted, regardless of which “alphabet letter” recovery we end up having,” he said.
For more information on the full results of the 2020 Age-In Study, email email@example.com with the subject line “2020 AGE-IN STUDY.”