BROOKFIELD, Wis., Dec. 06, 2016 (GLOBE NEWSWIRE) -- Data collected from Connecture, Inc. (NASDAQ:CNXR) indicates that shopping for Medicare Part D plans is up by 17 percent from last year’s Annual Election Period (AEP), and the share of all enrollments through multi-carrier brokers is up by 8.4 percent, from 29.8 percent to 38.2 percent. The AEP deadline for enrolling in Medicare Advantage and Medicare prescription drug coverage for the 2017 Plan Year ends December 7.
Connecture’s analysis suggests that while shopping is up, more consumers are delaying their plan selection and enrollment to identify the plan that provides the best coverage at the lowest possible price. This may be particularly important to consumers as costs for mandated prescription drug plans (PDP) have increased 9 percent to 12 percent over last year.
However, consumers who look only at the lowest premiums plans rather than the plan’s total annual cost could be in for a rude awakening.
Premiums vs. Total Annual Cost
“When we compare Medicare beneficiaries who had the benefit of comparing total annual cost which includes premium, deductible and co-pays, to those who may have only considered premium, we see a dramatic difference in the number of beneficiaries enrolled in their ‘best-fit’ plans,” said Jim Yocum, Connecture’s Senior Vice President of Federal Programs. “Typically, beneficiaries with access to total annual cost information are four times more likely to enroll in the lowest cost plan versus those who do not have access to this information.”
Connecture aggregated the total annual cost for a sample population of 50,000 Medicare beneficiaries and found that this group spent $172 million dollars in total premium and out-of-pocket costs—or about $1,870 per beneficiary. If those same consumers enrolled in plans based only on the lowest possible premium, their out-of-pocket costs would have been $2,229 or 16 percent higher than the sample.
“It’s clear that for all beneficiaries, regardless of their prescription drug needs, they are more likely to enroll in an overall cheaper plan when they are able to compare the projected total costs of the premiums plus the out-of-pocket expenses,” said Yocum. “Premium amounts bundle and obscure the total cost of health spending in a year, making rational tradeoffs difficult and leading to higher overall costs for Medicare beneficiaries. Without this visibility, picking a plan based solely on premiums leaves consumers vulnerable to higher out-of-pocket costs and lower satisfaction with their selected plan. For both consumers and plan sponsors, comparing and enrolling in plans based on total annual costs ensures better transparency, cost and ultimate product satisfaction for all involved.”
Providing Real Choice to Consumers
Due to increased plan premiums and rising drug costs, more Medicare beneficiaries are seeking help from brokers who can provide shopping and enrollment services. As a result, Connecture found that shopping activity and enrollment by brokers is up 27 percent and 17 percent, respectively, this AEP.
“Most people have limited understanding of the nuances of health insurance. Brokers and health insurance agents remain critical to stakeholders in this process, strategically leveraging their expertise to create a more informed consumer,” said Jeff Surges, President & CEO of Connecture.
In addition, brokers who specifically leverage health plan and drug comparison technologies can provide Medicare beneficiaries with more comprehensive and cost effective plan comparison and enrollment options.
“The lesson for brokers and health plans is that health insurance continues to be complex and intimidating for most people. By offering the right technology you are better positioned to help consumers and members find coverage and other benefits that suit them best,” said Surges.
Consumers looking to enroll in Medicare Advantage and Medicare prescription drug coverage should do so by December 7, 2016, the end of AEP for 2017 Plan Year coverage. Connecture provides technology solutions to 20 of the top 25 largest health plans and for Medicare.gov.
About Connecture
Connecture (NASDAQ:CNXR) is a leading web-based consumer shopping, enrollment and retention platform for health insurance distribution. Connecture offers a personalized health insurance shopping experience that recommends the best fit insurance plan based on an individual’s preferences, health status, preferred providers, medications and expected out-of-pocket costs. Connecture’s customers are health insurance marketplace operators such as health plans, brokers and exchange operators, who must distribute health insurance in a cost-effective manner to a growing number of insured consumers. Connecture’s solutions automate key functions in the health insurance distribution process, allowing its customers to price and present plan options accurately to consumers and efficiently enroll, renew and manage plan members.