Study:Seniors Need Educated About New Medicare Program

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As the Jan. 1 date for commencement of the Medicare+Choice program approaches, healthcare marketers face a formidable communication challenge, according to a new study by DiMark, Langhorne, PA.

The study, based on telephone responses from 804 men and women ages 64 1/2 to 77, found that most of the seniors who will be affected by the new program, aren't aware of the legislation and the options it presents. In an effort to assess the task facing healthcare marketers, the study took a look at how seniors would most like to receive healthcare information and what type of information healthcare providers will have to communicate about Medicare+Choice.

Medicare+Choice, which was passed as part of the Balanced Budget Act of 1997, expands the options available to Medicare beneficiaries. Under it, eligible seniors may chose to receive Medicare benefits by enrolling in one of several private health plans beyond the original Medicare program or the plans that are available through managed care organizations.

DiMark estimates that the government will spend $114 million to explain the program but predicts a minimum of $400 million in media spending will be needed to achieve widespread understanding of the program and its implications.

"That's a very conservative number," said DiMark CEO Kevin McKenna.

The figure is based on an estimate of 38 million seniors in the United States. Using advertising spending for past changes in Medicare as a model, the company found that 35 percent of seniors have employee coverage and that their healthcare plans will spend $5 a person to retain them. An estimated 40 percent have Medicare supplemental health insurance, commonly referred to as Medigap, which DiMark predicts will spend $10 per person to retain members. Close to half of the costs then will be spent on new acquisition efforts.

Much of the cost of informing the public about the new program will fall to healthcare providers rather than the government, which is something the public is coming to expect, McKenna said. Most respondents -- 23 percent -- said they would prefer to receive information from their doctors, with senior organizations as the favorite for 22 percent. The government was favored by only 16 percent, slightly ahead of insurance companies at 13 percent.

"This shows that as there is a shift in responsibility for Medicare from the government to the private sector, it's important to note that a larger portion of the communication falls on the private sector," McKenna said

Specifically, the report found that 35 percent of the respondents are aware of new legislation concerning Medicare. Of that, only 6 percent knew the name Medicare+Choice without being prompted. Among those familiar with the legislation, knowledge of options varied. While 80 percent of seniors were familiar with HMOs, only 8 percent were familiar with point of service plans, which allow patients to visit doctors not in their health plan's network at a higher cost.

Only 5 percent of all respondents said they definitely would or probably would enroll in the program, while 43 percent said they definitely won't or probably won't enroll. Fifty-two percent said they weren't sure how they will act. When asked what they thought about Medicare+Choice, 47 percent had a negative response, 22 percent responded positively, 18 percent were neutral and the remainder were undecided.

McKenna said the high negative reaction was something that could change.

"It's a hard number today, but it will change over time as healthcare insurers communicate and as the population ages and matures into it," he said, noting that people who are younger and still part of the workforce are more comfortable with and accepting of different healthcare options.

Fifty-seven percent of the seniors surveyed admitted their understanding of the legislation was so limited that they didn't know what type of information they would need to make a decision about Medicare+Choice. After hearing the concept statement, 21 percent still weren't sure whether enrollment was mandatory.

All this spells a need for clarity, McKenna said.

"The message should be clean and simple and it should demystify," he said. "Insurance companies that have seniors as patients should take time to explain the benefits that members already have."

Perhaps providing one of the best signs for marketers on how to get started, 35 percent of respondents said they would most like to receive information through the mail, followed by 13 percent who chose the newspaper as the preferred medium and 12 percent who selected television.

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