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The Medigap and Advantage Care Marketing Group

Autor:   •  November 21, 2017  •  3,123 Words (13 Pages)  •  658 Views

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Market Growth

The market for Medicare Advantage and Medigap plans has grown significantly. Overall, enrollment in Medicare Advantage plans rose 10 percent over the past three years; roughly 28 percent of all Medicare enrollees this year are in an Advantage plan. (Henry J Kaiser Family Foundation, 2015) Medigap programs have also seen an increase in enrollment numbers as result of new plans that entered the market as a result of changes made to Medigap guidelines. Requirements that mandated the addition new plans to the Medicare program virtually ignited a wellspring of new enrollments. (AHIP.org, 2014)

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Medigap is a supplemental coverage for Medicare beneficiaries. Seniors typically purchase Medigap coverage as a means to avoid high out-of-pocket costs that Medicare doesn’t cover, to enable themselves to maintain a more streamlined budget for medical expenditures, and to circumvent the experience of dealing with complicated health care providers invoices.

S.W.O.T. Analysis

Strengths

- Diverse lines of business

- Partners have a history of innovation and strategic alliances as well as a strong market presence

- Comprehensive set of products and policies

- Our pledge to make available Medicare Advantage services to participants for less out of pocket.

- Ability to maintain profitability with relatively small margins in comparison to non-Medicare healthcare insurance companies.

- Recurrent stream of revenue.

- Cross marketing

Weaknesses

- Our capacity to effectively price products and services is contingent on an ability to partner with strong organizations with competitive pricing structures.

- We are in an exceedingly competitive industry and we do have competitors who are more established in the health care industry in terms of market share and financial resources.

Opportunities

- Projections of Medicare spending growth is predicting a bounce back to 7.3 percent for the years 2016 through 2024 annually as a result of increased enrollment by the baby boomers, more desirable rates of consumption of the care plans, and accelerated billing rates set in motion by a more favorable financial climate.

- The government is expected to continue to allow private insurers to assist with Medicare managed care to curb financial risk.

Threats

- Significant reforms to the U.S health care system may have some unknown therefore, immeasurable impact on these plans for all health insurance companies.

- Rumored plans to draft Legislation that will reduce on Medicare Advantage payments from governmental budgets

- Potential changes in economic conditions could adversely affect results in our Commercial segment operations.

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Competition

The Medigap insurance market is a highly competitive industry worth billions of dollars with 10 million Medicare beneficiaries enrolled. Lower to middle income beneficiaries make up a significant percentage of policyholders because it’s easier for them to budget and control out of pocket costs. Building partnerships with well-known insurance brands is vital because individuals feel comfortable with companies they trust will pay on time and provide them with the freedom of choosing their preferred caregivers. The Medigap and Advantage Care Marketing Group will form these partnerships to build a loyal client base and maintain a competitive advantage.

Due to allegations of insurer fraud, consumer confusion, and duplicate coverage, regulations have been set in place by the government, limiting differentiation in coverage amongst insurance companies. With all plans having standard coverage, additional services offered by companies could be desirable to consumers. As a brokerage firm, The Medigap and Advantage Care Marketing Group will develop tools to determine what services, providers, etc. consumers are interested in, in addition to providing the lowest premiums with the maximum coverage. Competition is high, but The Medigap and Advantage Care Marketing Group has the necessary resources in place to effectively provide seniors with supplemental coverage.

Critical Issues

There are many critical issues faced by health care industries. The increased competition of the quality and cost of health care will cause any system to be unclear in driving the satisfaction of the customers (Schmid et. Al, 2010). The goal of health care systems is to contain costs without losing money while maintaining the quality and the benefits of the health care provided (Keuhner-Herbert, 2010).

The money spent on health care in the United States is higher than that of other countries. About 14% of gross domestic product in the United States is spent on services in the health care industry. The governments are responsible for about 45% of these health care expenditures. Private insurance and spending are responsible for about 40% of the cost, while the remaining 15% of the health care cost is covered by consumer out-of-pocket spending (Schmid et. Al, 2010)

In recent years, there has been an increase in the cost of health insurance. The prices for health care services are greater due to the inpatient hospital and pharmaceuticals being on the rise in expenditures (Schmid et. Al, 2010). Two drivers that will cause this trend to be on a steady rise is the increases in technology being developed and the increased percentage of the rise in the elderly population (Keuhner-Herbert, 2010). The following chart is a structure of how Medicare benefits are organized and paid for (Kaiser Family Foundation, 2014):

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Marketing Strategy

Based on the market population that Medigap and Advantage Care Marketing Group is attempting to target, print media will be utilized within each of the states of Texas, Louisiana, Arkansas, and Oklahoma. In addition

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