Last Tuesday, I gave my annual State of the Senior Market address to 370 agents from across the country. We’ll have a recording here soon, but if you’d like a quick summary, here are some of the highlights:
Ritter Year in Review
Our annual Medicare Supplement sales increased by 5%, Medicare Advantage sales increased by 17%, and Medicare Part D sales increased by 54%.
Annual Enrollment Period
MA enrollments during AEP were up 16% and Medicare Part D was down 26%, but in line with enrollments from 2015.
Here’s What’s Happening in the Office
We’ve had some office and staffing increases that we’re excited to share! More employees mean more support for agents, as well as improved services:
- Our staff increased by 17 employees, giving us a new total of 141 employees, with key additions on our communications team, in software development, in marketing, and in operations!
- We continued in our local and regional philosophy by adding an office in Uniondale, NY, and by signing the lease on another office building in Harrisburg!
- Our current locations include Harrisburg, PA, Scottsdale, AZ, Atlanta, GA, Omaha, NE, Uniondale, NY, and Nampa, ID.
- We acquired Hurst Kopp’s agency, United Insurance Marketing, which focuses primarily in western states, and SafePath Benefits, Inc, which focuses primarily in downstate New York. Our Uniondale office helps us achieve our goal of providing broker support to the New York metro market.
We can’t ignore our developments in technology either. Creating great tech for agents is one of the highlights of Ritter, and last year saw a lot of improvements:
- On RitterIM.com, we updated our Medicare Quote Engine (MQE) to include long-term care!
- On Medicareful.com we improved look and filtering capabilities, added the ability to collect eSOA’s, added two new carriers, linked enrollments to myBiz on RitterIM.com, added Med Supp quoting for four major insurers, enabled users to add their company logo to their page, added the ability to email a specific link to a plan for discussion or enrollment, and added the ability to create link for unlimited referral sources and landing pages.
Enrollment Stats for 2016 & AEP Review
- Med Supp production grew by 5% this year, with very high persistency in 2016.
- We had a 17% increase in Medicare Advantage enrollments and a 54% increase for Medicare Part D!
- Ritter paid out 79% more commissions in 2015, 45% more in 2016, and 66% more in the first month of 2017!
- The top 11 plans represented 98% of the business, with the bottom 11 representing less than 2%.
- Individual Medicare Advantage plans grew by 7% in 2016.
- Ritter carriers represent 94.1% of the entire PDP market!
Major Industry Trends
The Medicare industry is constantly evolving and changing! Here are the top industry trends to keep an eye on in the coming year:
- High persistency and low churn
- Concentration of business among top players
- Big Seven controls 76.2% of MA/PDP market
- WellCare buys Universal American and Centene buys HealthNet
- Aetna/Humana merger is off
- Anthem/Cigna merger is on life support
- Continued focus on Medicare Supplement Plan G
- Validation and restrictions on Household discount
- Plans are seeing slightly higher utilization
- Increased market share with the top four carriers
- Part B deductible increases
- Increasing plans filed with a preferred pharmacy cost sharing tier
- Striking differences in cost-sharing
- Part D sponsors are struggling to manage costs and adhere to assigned LIS members, making the chooser or agent market more profitable and desirable.
Changes in Washington
With the election of Donald Trump, there has been a lot of confusion, disruption, and questions revolving around the future of health care and the Affordable Care Act (ACA). Here are some things to keep an eye on:
- Donald Trump promised to repeal and replace Obamacare. The question then is how will that affect Medicare? How will it affect the 20+ million that are currently covered by ACA?
- His campaign included promises not to touch Medicare and tax reform.
- Tom Price was confirmed as the Secretary of Health and Human Services on February 10. He’s a former physician and U.S. Representative from Georgia. HHS has a trillion-dollar budget and 80,000 employees.
- Price has no interest in tackling Medicare within the ACA Repeal and Replace initiative. He’s not interested in taking on drug companies, favors creating a market for health care, which shifts more responsibility onto the consumer, likes HSA-styled plans with deductibles and vouchers, wants to handle Medicaid with block grants, and drive down malpractice cases.
- Seema Verma is the current CMS Director nominee. She is the architect for the Healthy Indiana Plan for Medicaid, and she consulted with other states with waiver programs. She has not taken a position on the ACA Repeal and Replace initiative, plans to implement Congress’s decision on the matter, promotes more personal responsibility in health care, and is not in favor of Price’s idea for a voucher program for Medicare.
Since ACA changed a lot in regards to health care law and practices, there are a lot of moving parts that will be in question if the Repeal and Replace initiative moves forward. Things that will need to be considered are:
- Guarantee Issue, Enrollment Periods, SEP’s
- Employer Mandate and Individual Mandate
- Coverage for adult children up to 26
- Medicaid expansion
- Health care exchanges
- Minimum essential benefits
- Subsidies and cost sharing reductions
- Limitation on age rating
- Minimum medical loss ratio on MA, large group, individual, and small group
Here’s how the ACA impacted Medicare and MA:
- “Strengthened” Medicare Trust Fund
- Phase out of Coverage Gap (with the help from drug companies)
- First-dollar coverage for preventative care
- Reductions in Medicare advantage funding
- Minimum MLR for MA Plans
- Elimination of the OEP and introduction of MADP
In addition to changes in D.C., there are some regulations that are coming that you should know about:
- A draft of the Medicare Marketing Guidelines was released in January before the Trump administration took over HHS and CMS. It’s the first time we’ve ever seen a “draft” of the guidelines. It typically releases in June.
- Section 100.7 increases the focus on getting CMS approval for agent websites.
- Section 120.4.4 changes the methodology of how CMS would pay GA’s, MGA’s, SGA’s, and FMO’s.
- On December 12, 2016, President Obama signed the 21st Century Cures Act which would bring back OEP and end exclusion for ESRD.
- Earlier in February, the advance notice for 2018 Medicare Payments was released. It shows a 0.25% increase in reimbursement but it could be as high as 2.75% when accounting for impact on risk adjustment. Final notice comes out in early April.
In 2017 and Beyond
In my State of the Senior Market Address, I don’t just look back – I look ahead too. Ritter has many up-and-coming changes and developments that are in the works right now. Here are some things you can look forward to in 2017 and beyond:
- Build out more enrollments for Medicareful
- Add Ritter staff to assist agents with landing pages to increase traffic, leads, and referrals
- Build database infrastructure for an enhanced CRM for agents
- Integrate Ritter applications: CRM, myBiz, MQE, Medicareful, etc.
- Build decision tools for Medicareful
I hope this address helped you to find new paths for your success. I am always asking for feedback, so please give us a call at 800-769-1847 and let us know your ideas or suggestions – it’s how we grow! Thank you so much for being a part of the Ritter family and for trusting us with your business. It is an absolute honor.