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Life Health > Health Insurance > Life Insurance Strategies

Medicare Advantage Growth Faces New Hurdles

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The Centers for Medicare & Medicaid Services recently proposed a series of new marketing and sales rules for Medicare Advantage and Prescription Drug plans. The intent of the new standards is to provide added protections to seniors from abusive or misleading Medicare sales practices. The result would mean significant changes in the way Medicare Advantage plans could approach prospective customers,

New rules

The proposed rules, if enacted, would severely limit company and agent interaction with seniors. They will impact everything from marketing plans and sales projections to advertising and distribution channel management.

CMS is mainly targeting 5 areas of marketing and sales with the proposed rules. (See chart.)

It is widely believed that complaints about unscrupulous and over-aggressive sales agents are the main impetus behind these new rules. CMS has heard complaints about “bait and switch,” inappropriate cross-selling and other hard-sell tactics.

It is reported that CMS has a strong desire to activate these new rules for the upcoming open enrollment period. While this timeframe is tight given the required comment and waiting periods, MA and PDP plans must prepare for the possibility that these new rules could be implemented in October 2008. Nobody is saying it will happen … and nobody is saying it won’t.

Don’t wait

Health plans cannot afford to just wait and hope the implementation gets stalled. The enrollment results of an entire MA and PDP selling season could be at risk. Smart Medicare executives will not want to be caught unprepared in October. Now is the time to formulate a revised marketing and sales strategy.

But what strategy will work under the new rules? That’s a good question, especially since the exact rules and precise wording are not yet decided. The only thing certain is that unsolicited contact, whether in person or over the phone, would be severely limited under the new rules.

For MA and PDP sponsors, one thing becomes more important than ever in this time of uncertainty–lead generation. One of the most practical and predictable methods to generate leads is direct response. Whether through mail, TV commercials, infomercials, radio or Internet, direct response “done right” can generate immediate consumer interaction … leads, leads, leads!

Effective direct response can take up the slack if new rules shut down other sales practices. Execution must be balanced and laser-focused, grounded in several key DR principles:

–Customer data must be segmented for maximum targeting.

–Creative messaging must contain a strong qualifier, persuasive product detail and a compelling call to action.

–Media strategies must be multi-tiered, blending mail, DRTV, Web, radio and telemarketing.

–Monitoring and tracking must accurately measure return on the marketing investment.

There is no greater selling opportunity than a qualified lead looking for answers. Ask any agent!


Is your Medicare Advantage marketing plan positioned to reach your 2009-2010 enrollment goals in a sales environment guided by CMS’s new rules? That’s the gut-check question you need to ask. As you measure your response, several core principles can serve as benchmarks:

o Leverage your brand position and drive leads at the same time.

oSegment and understand your customers to realize a much bigger payoff.

oSynchronize creative and media for maximum performance.

oConsider new and different (and compliant) grassroots tactics that can be deployed in the community.

oTake a fresh look at agent sales support tools. With commissions leveling, making the agent sales process easier will help retain and motivate distributors who may otherwise bail out of this market under a reduced compensation scenario.

oReinvigorate your Internet marketing strategy since more and more seniors are turning to the Web to find the services they need.

How you respond to these looming regulatory issues can make (or break) your enrollment year. High performance direct response will transform your marketing and sales into immediate consumer interactions–connect one-on-one with target prospects, leverage your sales value proposition, convert shoppers into a leads and then, turn leads into revenue.

Lindsay R. Resnick is chief marketing officer of Finelight, a national marketing firm. He can be reached at


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