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Health Insurance and Medicare - US - May 2011

Terms

The following terms are also used in the report:

  • Original Medicare - Original Medicare consists of Part A (hospitalization) and Part B (medical and doctors) coverage. When enrolling in Original Medicare, Part A and Part B are automatically given to the new beneficiary but there is a monthly charge of approximately $119 for the Part B coverage that is generally taken out of one’s Social Security check. However, a person can decide not to take Part B at the time of enrollment and pick up the coverage at a later time but for a higher premium.
  • Medicare Advantage - Medicare Advantage is Part C of Medicare. It includes Part A and Part B coverage and oftentimes Part D (prescription drug) as well. Medicare Advantage is offered by a number of traditional health insurers and is under contract by the federal government to supply Medicare coverage. Beyond Parts A, B, and D, Medicare Advantage plans often carry wellness programs as well as specialty insurance products, such as dental, hearing, and vision care.
  • Medicare Supplement or Medigap Insurance - Supplement or Medigap policies cover the expenses not covered by Original Medicare Parts A and B as Medicare pays only a portion of the costs of care. The type of costs that Supplement insurance cover are generally the expenses of coinsurance and deductibles.
  • Health Care Reform - The Patient Protection and Affordable Care Act (PPACA), a federal statute signed into law by President Obama on March 23, 2010, and the Health Care and Education Reconciliation Act of 2010 make up the Health Care Reform of 2010. The laws focus on reform of the private health insurance market, such as providing better coverage for those with pre-existing conditions, improving prescription drug coverage in Medicare, and extending the life of the Medicare Trust fund by at least 12 years, among other things.

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Table of contents

  1. Scope and Themes

      • What you need to know
        • Data sources
          • Consumer survey data
            • VMS
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                    • Companies mentioned in this report:
                    • Executive Summary

                      • Industry overview
                        • Health insurance companies are making money
                          • Baby Boomers are brand new to the world of Medicare
                            • Appeal of the internet
                              • Innovation—efficiencies and wellness programs getting a boost
                                • Lots of advertising but with a similar format
                                  • Cost and confusion main barriers to entry
                                    • Uneasiness about the future
                                      • Paying for healthcare a major concern
                                      • Insights and Opportunities

                                          • Key points
                                            • Baby Boomers—meet Medicare
                                              • For Swing and WWII, price is key
                                              • Inspire Insights

                                                  • Trend: Empowered Seniors
                                                    • Specifics
                                                      • Implications
                                                      • Market Size and Forecast

                                                        • Key points
                                                          • NHE is growing at a faster pace than GDP
                                                            • Figure 1: Growth in NHE and GDP, 2004-19
                                                          • Costs of hospital services especially on the rise
                                                            • Figure 2: Consumer price indices overall and for related healthcare items, annual rates of change, 2001-10
                                                          • Premiums have more than doubled in the past 10 years
                                                            • Figure 3: Average annual health insurance premiums and worker contributions for family coverage, 1999-2009
                                                          • Most health dollars come from private insurance and Medicare
                                                            • Figure 4: Source of nation’s healthcare dollars, 2007-09
                                                          • Private insurers lost 7.5 million enrollees from 2007 to 2009
                                                            • Figure 5: Number and percentage of U.S. population uninsured and insured, 1999-2009
                                                          • Nearly all those 65+ have some type of health insurance
                                                            • Figure 6: Number and percentage of U.S. population 65+ uninsured and insured, 2009
                                                          • Private insurers gain only slightly among the 65+ market
                                                            • Figure 7: Number and percentage of U.S. population 65+ uninsured and insured, 1999-2009
                                                          • Some 47 million in total currently on Medicare
                                                            • Figure 8: Medicare enrollment, 2000-10
                                                        • Competitive Context

                                                          • Key points
                                                            • Effects of Health Care Reform
                                                              • Medicare Part D Doughnut Hole Closing Up
                                                                • Figure 9: Medicare Part D Standard Benefit Parameters, 2006-10
                                                              • Changes already in the mix
                                                                • Discontinuations of Medicare Advantage PFFS Plans
                                                                • Segment Performance

                                                                  • Key points
                                                                    • Some 90% supplement Medicare with other insurance
                                                                      • Figure 10: Supplemental coverage among Medicare beneficiaries, by income, 2008
                                                                    • About 11.4 million currently in Medicare Advantage plans
                                                                      • Figure 11: Medicare Advantage enrollment, 2000-10
                                                                    • Some 90% of Medicare beneficiaries have prescription drug plans
                                                                      • Figure 12: Prescription Drug Coverage among Medicare beneficiaries, 2010
                                                                  • Marketing Channels

                                                                    • Key points
                                                                      • The internet and agents/brokers are considered best sources
                                                                          • Figure 13: Sources used for information about health insurance purchased individually, by type of Medicare insurance, February 2011
                                                                        • Men especially active in searching out information on health insurance
                                                                          • Figure 14: Sources used for information about health insurance purchased individually, by gender and age, February 2011
                                                                          • Figure 15: Source used for deciding on health insurance purchased individually, by household income and employment status, February 2011
                                                                        • Medicare website and agents/brokers two best sources
                                                                          • Figure 16: Sources used for learning about Medicare Supplement or Medicare Advantage insurance, by type of Medicare insurance, February 2011
                                                                          • Figure 17: Sources used to learn about Medicare Supplement or Medicare Advantage insurance, by gender and by age, February 2011
                                                                          • Figure 18: Sources used to learn about Medicare Supplement or Medicare Advantage insurance, by household income and employment status, February 2011
                                                                        • Most women read materials, shop for best options
                                                                          • Figure 19: Attitudes about health insurance, by gender, February 2011
                                                                          • Figure 20: Attitudes about health insurance, by age, February 2011
                                                                          • Figure 21: Attitudes about health insurance, by household income, February 2011
                                                                          • Figure 22: Attitudes about health insurance, by employment status, February 2011
                                                                      • Market Drivers

                                                                        • Key points
                                                                          • Some 5 million more will be eligible for Medicare by 2015
                                                                            • Figure 23: U.S. population, by age, 2011-20
                                                                          • Average life expectancy is 78
                                                                            • Figure 24: Life expectancy of U.S. population, 2007
                                                                          • The economy has not recovered
                                                                            • Figure 25: U.S. unemployment rate, by month, July 2008-February 2011
                                                                            • Figure 26: Total nonfarm payroll losses or gains, in thousands, July 2008-February 2011
                                                                            • Figure 27: Employment–Population ratio, January 2000-February 2011
                                                                          • Decline in household wealth
                                                                            • Figure 28: Median change in family wealth, 2007-09, by age of household head and region
                                                                          • Concerns about debt
                                                                            • Figure 29: Composition of consumer debt, 1999-2010
                                                                            • Figure 30: Consumers with new foreclosures and bankruptcies, 1999-2010
                                                                          • Housing market not bouncing back
                                                                            • Figure 31: Median price of homes, 1998-2010
                                                                          • The age of retirement is being pushed up
                                                                            • Figure 32: Age at which workers expect to retire, 2000 and 2011
                                                                            • Figure 33: Worker confidence in having enough money to live comfortably throughout their retirement years, 2000-11
                                                                            • Figure 34: Retiree confidence in having enough money to live comfortably throughout their retirement years, 2000-11
                                                                            • Figure 35: Confidence in having enough money to pay for medical expenses in retirement, 2001-11
                                                                        • Leading Companies

                                                                          • Key points
                                                                            • Steep gains for industry from 2007 to 2009
                                                                              • Figure 36: Top 10 health insurance groups, by Direct Written Premium, 2007-09
                                                                            • UnitedHealth Group most admired company
                                                                              • Figure 37: Fortune’s 2011—World’s Most Admired Companies
                                                                          • Brand Qualities

                                                                            • Key points
                                                                              • BCBS, Kaiser, Humana among best plans
                                                                                • Figure 38: Member health plan ratings, April 2010
                                                                              • Kaiser Permanente, Highmark best Advantage plans
                                                                                • Figure 39: Average rating for Medicare Advantage plans, 2011
                                                                              • Confidence in health insurance industry is dismal
                                                                                • Figure 40: Level of confidence consumers have in various institutions, December 2009
                                                                              • Trust and money are issues
                                                                                • Figure 41: Attitudes about trust and financial institutions, January 2011
                                                                              • Uncertainty about Health Care Reform
                                                                                • Figure 42: Attitudes concerning insurer communications about Health Care Reform, January 2011
                                                                            • Innovation and Innovators

                                                                              • Key points
                                                                                • Kaiser’s HealthConnect and My Health Manager
                                                                                  • Highmark’s Wellness Where You Live
                                                                                    • Online management of weight, chronic conditions
                                                                                      • Digital Health Coaching by HealthMedia
                                                                                        • UnitedHealth Group’s fight against diabetes
                                                                                          • Pharmacy Saver from UnitedHealthcare
                                                                                            • Humana Walmart-Preferred Rx Plan
                                                                                              • OptimizeMe App by OptumHealth
                                                                                                • MyHumana Mobile
                                                                                                • Marketing Strategies

                                                                                                  • Key points
                                                                                                    • Overview
                                                                                                      • Figure 43: Medicare estimated mail volume, Q1 2009-Q4 2010
                                                                                                      • Figure 44: Top five Medicare Mailers, Q4 2009-Q4 2010
                                                                                                    • Print advertising
                                                                                                      • Figure 45: Humana Medicare Advantage print ad, 2011
                                                                                                      • Figure 46: AARP/Unitedhealthcare Prescription Solutions print ad, 2010
                                                                                                      • Figure 47: WellCare Medicare print ad, 2010
                                                                                                      • Figure 48: Blue Shield of California Medicare print ad, 2010
                                                                                                      • Figure 49: BlueCross BlueShield of Arizona Webinar print ad, 2010
                                                                                                      • Figure 50: AARP/UnitedHealthcare SecureHoizons Medicare Plan Seminars print ad, 2010
                                                                                                    • Direct mail advertising
                                                                                                      • Figure 51: Care Improvement Plus direct mail ad, 2011
                                                                                                      • Figure 52: Blue Cross Anthem Medicare Supplement Insurance direct mail ad, 2011
                                                                                                      • Figure 53: BlueCross BlueShield of Florida Medicare Guide direct mail ad, 2011
                                                                                                      • Figure 54: AARP/UnitedHealthcare MedicareRx Plan direct mail ad, 2011
                                                                                                    • Online and email advertising
                                                                                                      • Figure 55: Kaiser Permanente Senior Advantage HMO online ad, 2010
                                                                                                      • Figure 56: Humana with Walmart Part D online ad, 2010
                                                                                                      • Figure 57: AARP UnitedHealthcare Medicare Plans online ad, 2010
                                                                                                      • Figure 58: MyTotalCommerce email ad, 2010
                                                                                                    • Television advertising
                                                                                                      • Figure 59: Highmark, Man works on car, television ad, 2010
                                                                                                      • Figure 60: AARP Woman with numbers on Medicare, television ad, 2010
                                                                                                      • Figure 61: Kaiser Permanente Linda, television ad, 2010
                                                                                                      • Figure 62: Medicare Health Care Reform changes, television ad, 2010
                                                                                                  • The Consumer—Health Insurance Ownership

                                                                                                    • Key points
                                                                                                      • Health insurance widely owned among those 66+
                                                                                                          • Figure 63: Ownership of selected insurance products, by gender, February 2011
                                                                                                          • Figure 64: Ownership of selected insurance products, by age, February 2011
                                                                                                          • Figure 65: Ownership of selected insurance products, by household income, February 2011
                                                                                                        • Health insurance peaks among the employed
                                                                                                          • Figure 66: Ownership of selected insurance products, by employment status, February 2011
                                                                                                        • Supplemental insurance owned by 36%, 17% have Advantage plan
                                                                                                            • Figure 67: Type of health insurance coverage, by gender, February 2011
                                                                                                            • Figure 68: Type of health insurance coverage, by age, February 2011
                                                                                                            • Figure 69: Type of health insurance coverage, by household income, February 2011
                                                                                                            • Figure 70: Type of health insurance owned, by employment status, February 2011
                                                                                                          • Satisfaction high with current provider
                                                                                                            • Figure 71: Satisfaction with health insurance, by gender, February 2011
                                                                                                            • Figure 72: Satisfaction with health insurance, by age, February 2011
                                                                                                            • Figure 73: Satisfaction with health insurance, by employment status, February 2011
                                                                                                          • BCBS and UnitedHealthcare are the largest providers
                                                                                                              • Figure 74: Health insurance provider, by type of insurance plan, February 2011
                                                                                                              • Figure 75: Health insurance provider, by age, February 2011
                                                                                                              • Figure 76: Health insurance provider, by household income, February 2011
                                                                                                              • Figure 77: Health insurance provider, by employment status, February 2011
                                                                                                            • One in three made recent Medicare change
                                                                                                                • Figure 78: Changes in Medicare insurance coverage during past two years, by gender, February 2011
                                                                                                                • Figure 79: Changes in Medicare insurance coverage during past two years, by age, February 2011
                                                                                                                • Figure 80: Changes in Medicare insurance coverage during past two years, by household income, February 2011
                                                                                                                • Figure 81: Changes in Medicare insurance coverage during past two years, by employment status, February 2011
                                                                                                              • Confusion, costs main barriers for Advantage, Supplement
                                                                                                                  • Figure 82: Reasons haven’t purchased Medicare Supplement or Medicare Advantage insurance, February 2011
                                                                                                              • The Consumer—Views about Retirement, Healthcare

                                                                                                                • Key points
                                                                                                                  • Retirement takes hold at age 70
                                                                                                                      • Figure 83: Retirement status of those 63+, by gender and age, February 2011
                                                                                                                    • Adults of all ages concerned about retirement
                                                                                                                      • Figure 84: Attitudes about retirement, by gender, February 2011
                                                                                                                      • Figure 85: Attitudes about the economy and retirement, January 2011
                                                                                                                    • Healthcare costs are a major concern
                                                                                                                        • Figure 86: Attitudes about health insurance and retirement, by gender, February 2011
                                                                                                                        • Figure 87: Attitudes about health insurance and retirement, by age, February 2011
                                                                                                                      • Healthcare costs also big concern to high earners
                                                                                                                        • Figure: 88 Attitudes about health insurance and retirement, by household income, February 2011
                                                                                                                      • Retirees very concerned about costs of healthcare, money to live on
                                                                                                                        • Figure 89: Attitudes about health insurance and retirement, by employment status, February 2011
                                                                                                                    • The Consumer—Views about Finances, the Economy

                                                                                                                      • Key points
                                                                                                                        • Many became worse off financially in last year
                                                                                                                          • Figure 90: Economic outlook: Finances better or worse than 12 months ago, by gender and by age, July 2009-September 2010
                                                                                                                          • Figure 91: Economic outlook: finances will be better or worse in next 12 months, by gender and by age, July 2009-September 2010
                                                                                                                        • People 60+ conservative about finances, dislike debt
                                                                                                                            • Figure 92: Attitudes about personal finance, by gender and by age, July 2009-September 2010
                                                                                                                        • The Consumer—Views about Health, Nutrition

                                                                                                                          • Key points
                                                                                                                            • Health, nutrition, and doctor’s advice very important
                                                                                                                                • Figure 93: Attitudes about food and nutrition, by gender and by age, July 2009-September 2010
                                                                                                                                • Figure 94: Attitudes about vitamins and medicine, July 2009-September 2010
                                                                                                                                • Figure 95: Attitudes about doctors and guidance on health, July 2009-September 2010
                                                                                                                            • Cluster Analysis

                                                                                                                                • Cluster 1: Well-insured Seniors
                                                                                                                                  • Cluster 2: Retirement Ready
                                                                                                                                    • Cluster 3: Vulnerable Seniors
                                                                                                                                      • Characteristics
                                                                                                                                        • Characteristic tables
                                                                                                                                          • Figure 96: Health insurance and Medicare clusters, February 2010
                                                                                                                                          • Figure 97: Ownership of selected insurance products, by health insurance and Medicare clusters, February 2010
                                                                                                                                          • Figure 98: Type of health insurance owned, by health insurance and Medicare clusters, February 2010
                                                                                                                                          • Figure 99: Satisfaction with health insurance, by health insurance and Medicare clusters, February 2010
                                                                                                                                          • Figure 100: Attitudes about health insurance and retirement, by health insurance and Medicare clusters, February 2010
                                                                                                                                        • Demographic tables
                                                                                                                                          • Figure 101: Health insurance and Medicare clusters by gender, February 2010
                                                                                                                                          • Figure 102: Health insurance and Medicare clusters by household income, February 2010
                                                                                                                                          • Figure 103: Health insurance and Medicare clusters by marital status, February 2010
                                                                                                                                          • Figure 104: Health insurance and Medicare clusters by education, February 2010
                                                                                                                                          • Figure 105: Health insurance and Medicare clusters by employment, February 2010
                                                                                                                                        • Cluster methodology
                                                                                                                                        • Appendix—Trade Associations

                                                                                                                                          Companies Covered

                                                                                                                                          • American Association of Retired Persons (AARP)
                                                                                                                                          • American Council Of Life Insurers
                                                                                                                                          • American Medical Association (AMA)
                                                                                                                                          • Blue Cross and Blue Shield Association
                                                                                                                                          • Facebook, Inc.
                                                                                                                                          • Henry J. Kaiser Family Foundation
                                                                                                                                          • Insurance Information Institute Inc.
                                                                                                                                          • Johnson & Johnson
                                                                                                                                          • National Association of Insurance Commissioners (NAIC)
                                                                                                                                          • National Association of Realtors (NAR)
                                                                                                                                          • National Institutes of Health
                                                                                                                                          • Safeway Inc
                                                                                                                                          • Target Corporation
                                                                                                                                          • The Blue Cross
                                                                                                                                          • U.S. Bureau of Labor Statistics
                                                                                                                                          • Walgreen Co
                                                                                                                                          • Walmart Stores (USA)
                                                                                                                                          • WellPoint, Inc.
                                                                                                                                          • YMCA of the USA

                                                                                                                                          Health Insurance and Medicare - US - May 2011

                                                                                                                                          £2,684.63 (Excl.Tax)