For seniors, Medicare Advantage (MA) remains a valuable alternative to traditional Medicare, offering comprehensive, cost-effective healthcare, but policy shifts and market changes have made it harder for insurers to achieve performance and profit goals. Amid declining financial performance, insurers such as Cigna have reduced their presence or exited MA altogether. Humana, after a significant quality-rating drop, still expects MA to negatively impact its results despite a stronger Q3. Yet some smaller insurers such as Devoted Health are making advances in a challenging market, with a 4.28 average CMS Star Rating for 2025 and expansion plans in 20 states. As insurers’ strategies diverge, consumers will have fewer high-quality plan options in 2025 and will have to navigate shrinking provider networks.
Building Enduring Value Through Dynamic Experiences And Relationships
Higher medical utilization by members, the growing difficulty of achieving CMS Star Ratings, and reimbursement pressures are pushing many health insurers (HIs) to the brink, but HIs can persevere by delivering great experiences that achieve lasting value for members and for their organization. To build value with members, HIs will:
Create hybrid experiences to build strong relationships. While digital engagement becomes more prevalent in healthcare, consumers, especially seniors, still place high value on human interaction. Health insurers can boost customer satisfaction by quickly achieving first-contact resolution in customers’ preferred channels. By leveraging these interactions, insurers can guide seniors in using digital tools while maintaining a personal touch. Health insurers that invest in hybrid experiences achieve higher customer experience scores. In turn, improved member experience can connect to better Star Ratings.
Make benefits easy to find and use. In recent years, to maintain a competitive edge, health insurers have continually added benefits to MA products. Unfortunately, adding has only diluted value and led to a lot of “me too” in the market. Seniors often feel overwhelmed by or unaware of their benefits. HIs put too little effort into educating plan members and integrating their benefits. Many insurers adopt a “set it and forget it” approach, providing information only during initial sign-up and hoping members remember what they have (or don’t). To optimize the impact for both members and the plan, insurers should tailor benefits more closely to individual needs, streamline access, educate continuously in terms they understand, and improve integration of benefits.
Get Tactical About Your Next Move On Medicare Advantage
Forrester clients can read the report — Medicare Advantage: Golden Goose Or Albatross? — to discover the seven steps health insurers can take to enhance future plan performance. Along with these recommendations, Forrester clients will gain insights from real-world examples across health insurers, as well as from technology and service providers that support Medicare Advantage. Forrester clients can also schedule a guidance session for deeper understanding of their next move in MA.
Thank you to Accenture, Florida Blue, HealthScape Advisors, Optum, Papa, Priority Health, and Soda Health for their time and contributions to this research.
Tiffany Do contributed to this blog post.
