Tagged with the moniker "late retirees," this group of Medicare first-timers isn’t ready to call it quits. How can you help them? Find out below:
Over the next five years about 20 million Americans will turn 65. Or put another way, a lot of people are becoming eligible for Medicare. Managed Care Organizations (MCOs) selling Medicare Supplement and Medicare Advantage products see these Boomers as the future for their growth. While Medicare’s Annual Enrollment Period and Open Enrollment Period remain important for attracting individuals seeking to switch plans, Medicare first timers represent the customer acquisition ‘brass ring’.
New to Medicare
Attracting and enrolling consumers at the time of their first Medicare purchasing decision has big payoff. By taking them on a frictionless buying journey, activate them smoothly, and serve them well, Medicare plans can enjoy strong annual retention and realize significant customer LifeTime Value. But this may be easier said than done. Knowing when prospective Medicare customers turn 65 is basic ‘blocking & tackling’ for any savvy Medicare marketer. Knowing when they’re ready to buy is another story. What used to be ‘retirement at 65’ and enroll in Medicare is now a moving target. More and more Boomers are continuing to work and stay on their employer sponsored health plan until they are ready to retire.
Clearly, MCOs with Group and Individual business should have an advantage of capturing ‘same brand’ members with an internal cross-selling effort to convert them to their Medicare products. However, ‘should’ is the operative word here. According to Deft Research only one-third of Medicare enrollees went to a plan with their same Group or Individual commercial plan sponsor.
Over 25% of Americans ages 55 to 74 remain working. Projections from the Bureau of Labor Statistics have this group growing to over 30% of the workforce by 2030. Certainly, the pandemic was a curveball to many retirement plans. Due to unexpected unemployment and loss of income, or simply the comfort of the new norm of work-from-home, many Boomers have decided to put off retirement.
In recent years, however, there has been a noticeable trend toward retiring later that can be attributed to six factors:
Don’t forget about ‘never retirees’ – nearly one-quarter of Americans say they have no plans to retire. Retirement in the U.S. is getting more and more challenging with many impediments to a smooth, comfortable retirement: credit card debt, mortgage obligations, 401(k) volatility, inadequate savings, long-term care, illness and pandemics.
Today’s baby boomers are reaching retirement in worse financial shape compared to previous generations. Almost half of Boomers have failed to save for retirement, and of those that have savings, 28% have less than $10,000. There’s definitely ‘nest egg angst’ among today’s Boomers, especially when it comes to future healthcare costs.
According to Fidelity Investments, a 65-year-old couple retiring today could need as much as $300,000 for healthcare and medical expenses in retirement, potentially taking upwards of 30% of their Social Security benefits. While 4-in-10 people believe Medicare will provide complete coverage for all their health care needs, it just isn’t so. Medicare may help pay for some health care costs in retirement, but it does not cover all of it. Of particular concern is long-term care.
Over the past 12 months Google Trends has seen the search term “health” appear in 10 times more Google search queries than the search term “retirement. “Blood pressure” has appeared in 14 times more than “annuity.” With approximately 85% of older adults having at least one chronic health condition and 60% have at least two, future health looms large with the Boomer audience, and any healthcare cost gaps down the road is an important consideration. Making the wrong Medicare insurance choice when first enrolling can not only be costly but may mean not being able to get the best plan later due to penalties or exclusions.
Classic Direct Response
As Medicare MCOs troll the turning-65 consumer birthday databases, New-To-Medicare outreach usually begins 12-18 months out. In addition to introducing a plan’s offerings as a preferred solution for prospects’ Medicare needs, early in the outreach process is a good time to find out if they are really a qualified prospect. Will they be in the market now or later?
By using proven direct marketing tactics to encourage interaction with this target audience (in this case those working past age 65) you can leverage communications that establish and maintain an ongoing one-on-one relationship with prospective customers. It’s an opportunity to move into their lives as a valid, informative resource. Provide value, provoke action, and inspire confidence.
Here’s a classic direct response technique to consider:
Qualify: Attracting and engaging Medicare’s elusive ‘late retirees’ starts by asking one simple question: Are you planning to work past your 65th birthday? Take an approach built on strong yet carefully crafted language, keywords, and a welcoming tone to quickly capture attention and qualify your audience. Open the door to have a conversation and share an opinion or point of view, don’t make it about selling. It’s the beginning of a one-on-one relationship that’s all about them and their needs.
Offer: This is the promised payoff for responding, a compelling reason to engage. It’s an offer of curated, relevant information to help prospects sort through something they care about, need, and see value: What’s my path to purchase of a Medicare plan if I’m working past my 65th birthday? Examples of offers for the ‘late retiree’ crowd may include:
Product: This is a ‘tell it, don’t sell it’ moment to introduce your MCO and credentials as a resource offering relevant, valuable advice. Consumers’ perceptions and emotions have the greatest influence on their future actions. Take this opportunity to be relational, not transactional. Move from a promotional voice to one of an advocate. Make content personal, keep it simple and always answer the customer's question: What's in it for me?
Call to Action: Provide clear direction for next steps when the audience reads or hears your message. Leverage data and insights on targeted customers to make sure to show up in their most preferred channels for discovery, interaction, and engagement. Activate an omnichannel mix not only to optimize marketing ROI, but to help assure continued engagement over the course of the late retiree’s decision process…."Wow, this company knows me and stays with me, why would I leave them."
Today’s perpetually connected Boomers are impatient and demanding. They cherish convenience and expect instant gratification from their most respected brands. They’re willing to respond directly from their device of choice, so be there when they need you. As Boomers approach retirement they consider wellness – both health and financial – a priority. Retirement isn’t the culmination of their life journey, it’s the beginning of their time to learn, enjoy, relax, and explore…a new chapter in life. Most importantly they want a secure retirement.
The emotion generated around ‘retirement’ can be a persuasive response driver, especially for those working beyond their 65th birthday. Late Medicare market entrants, usually coming off employer or individual commercial health coverage, are looking for help. They seek a reliable, accessible source so they can be informed buyers in their first (and hopefully last) Medicare coverage decision.
For most Boomers, Medicare is the first time buying health insurance on their own, without assistance from an HR department. Demonstrating you know what’s important to them, what truly matters, and what they need to make a smart decision will go a long way toward establishing a connection of mutual value.
By proving you’re a dependable, consistent, and available resource, these prospects will keep coming back for more, but most importantly, when it comes time to purchase a plan, you’ll be their preferred option. Through sales-cycle nurturing and active advising you’ve created an empowered, loyal Medicare buyer.
Lindsay R. Resnick is executive vice president of Wunderman Thompson Health.