Humana and UnitedHealth dominate the fast-growing Medicare Advantage market across the country. But Washington-based Premera Blue Cross proved that insurers can challenge the top dogs.
Although Premera has a strong presence in its region with almost 1.8 million members, it wasn't in the Medicare Advantage market. That changed two years ago when it introduced its first Medicare Advantage products into the competitive market. It went from zero to 25,000 members in two years.
To learn the secrets of Premera's success, FierceHealthPayer spoke with Tracy Bos, director and general manager of Premera's senior markets.
FierceHealthPayer: How did Premera enroll so many new Medicare Advantage members in just two years?
Tracy Bos: We see the key to our success as a combination of our widespread portfolio--we have four products on the market and they meet the member where they are from a health perspective--and a marketing campaign that we're really proud of.
It's about understanding the market well enough to design a product that resonates with the people in the market. We did a lot of heavy lifting and deep thinking in the product design to make sure the products meet the needs of this market.
We also created a parallel path of engagement and partnership with providers so they were aware of our entrance into this market. It's a diligent effort--you really have to dot your Is and cross your Ts because the market is so highly regulated.
Bos: For 2015, all of our products are managed care products. Two of them are HMO plans with a point-of-service add-on to extend out-of-network coverage. And then two of them are more of a pure and traditional HMO product. The zero premium product is by far our most popular plan with a significant portion of our Medicare Advantage population, about 75 percent, in that plan.
Our zero premium plan is really competitive. And we have a broad network of highly respected providers. And I can't overstate the importance of the Premera brand.
A lot of employers in our area offer Premera plans to their members and when you add the Blue Cross portion to that, it makes Premera a well respected brand in this demographic. So the two points together make quite a nice partnership.
FHP: As a new entrant in the Medicare Advantage market, how did you design your products?
Bos: We based our product design on market research, existing marketplace plans and some in-depth focus groups with seniors to make sure we understood what was important to them from a health brand.
We also worked with providers to make sure that we understood their needs. From a provider perspective, it's about ease of management in making sure that their patients can get the care the provider thinks is best for them.
FHP: What was your marketing approach to introduce your new Medicare Advantage plans to seniors?
Bos: We launched a multi-touch, direct mail marketing campaign targeted at seniors in 2013 for the 2014 plan year. We included a growing call to action to the seniors about what we had to offer. And we connected with providers to do affiliation marketing with them. We also used traditional paper marketing campaigns as well as a pretty strong digital presence and a television campaign.
The direct mail campaign was very successful for us, largely because a lot of large employers have Premera as their plan, so to have it available for seniors resonated as well.
FHP: Have you found that consumers in the senior market are different from those in your other markets?
Bos: Absolutely. This market wants to make an informed choice. We have found that the direct mail channel is more effective than it is for other demographics. It seems to resonate with them as they try to make their health choices.
We saw success in the direct mail campaign, which highlighted our entrance into the market and in the visibility of the Premera brand and the broad set of products that we had to offer. And we had great visuals and it was a unique piece. It wasn't just a standard card. It had some visually appealing aspects to it.
FHP: You grew significantly in your second year. What do you attribute to that success?
Bos: There were two things that were probably key for us in the second year.
We were consistent in terms of our product approach and our marketing approach. So what we did in the second year was sustain that product portfolio, which is important in that market because it shows that you're committed and there for your members and will be a consistent player.
We were also able to increase our provider network. We have a long and rich partnership with several key providers in our state and those came fully to fruition for us when it was time for annual selection this year.
And we had a pretty solid retention across our plans between the first year and second year. We certainly did have some turnover; we made some pricing adjustments, so we saw a little bit of churn. But it was in line with our expectations.
FHP: What lessons have you learned so far?
Bos: Our campaign and products in the market have been well received, but there are always opportunities to do things better or differently. And we're constantly testing our marketing approach to ensure that we're as effective as we can be with the dollars that we spend.
So we did make some changes after our first year entry into the plan and last year's launch period. They were nuances in terms of determining what pieces resonate with each audience, targeting more specifically, evaluating copy, refining the marketing tools in our toolkit and refining our digital media investments.
FHP: What's next for Premera's Medicare Advantage market?
Bos: Premera is committed to this fast-growing market. Our plan is to continue to grow and provide great coverage and benefits to these members and increase our market share. We're evaluating and looking at where we can do things better. It's being member-focused and keeping that in the front of minds as we do any planning with this portfolio. Making sure that what we're bringing to the market meets these members' needs.
For this coming year, we're looking at leveraging content marketing that's based on our own content and delivering that to our seniors in a way that resonates for them. We're rolling out our own blog that doesn't just address our plan design or benefits, but focused on lifestyle, to give seniors information that resonates with them based on where they are in their lives.
[Editor's Note: This interview has been edited and condensed for length and clarity.]