Medicare consumer journey/demographics/psychographics

Part
01
of three
Part
01

Medicare - Demographics

In 2017, 45.6% of people on Medicare was male, and 54.4% were female, 47.8% were between 65 and 74 years. Around 75% of the people on Medicare in 2017 were white.

DEMOGRAPHICS OF PEOPLE ON MEDICARE

The demographics of people on Medicare are provided below in terms of age, gender, income, education level, marital status, race/ethnicity, and area of residence.

Age

  • In 2016, over one-third of people receiving Medicare benefits were aged 75 years and older and about one in six beneficiaries (16%) qualified for coverage before turning 65 years, based on permanent disability. These individuals tend to have lower incomes and higher rates of health problems than older beneficiaries, including cognitive impairments and limitations in activities of daily living.
  • Many Medicare beneficiaries are between the ages of 65 and 67 years.
  • In 2016, nearly 9.2 million beneficiaries were between the ages of 65 and 67 years—over 16% of the Medicare population.
  • By the end of 2017 Medicare beneficiaries under 65 years constituted 15.5% of the Medicare population, 47.8% were between 65-74 years, and 36.7% were 75 years or older.

Gender

  • As of 2016, 45% of the Medicare population was male, and 55% were female.
  • By 2017, 45.6% of the Medicare population was male, and 54.4% were female.

Income

  • Many beneficiaries live on modest incomes. Half of them have incomes less than two times the federal poverty level ($26,200 in 2016).
  • Many beneficiaries have limited financial resources. In 2016, One in four had less than $14,550 in total savings (i.e., retirement accounts and financial assets) in 2016.
  • In 2017, 40.5% of beneficiaries had less than $25,000 and 59.5% had $25,000 or more.

Education level

  • According to a 2017 report, in 2013, 20% of Medicare beneficiaries had no high school diploma, 27% had high school diploma only, and 52% attended some college or attained higher levels of education.
  • Since 84.5% of Medicare beneficiaries are older than 65 years, 13.7% have bachelor degree as their highest degree.
  • About 75% of people on Medicare are white. Therefore, as of 2017, the education level in for white people in the US is given as; high school diploma (25.8 %), bachelor's degree (22.3%), master's degree (9.5 %), professional degree (1.5 %), and doctorate (2%).

Marital status

  • As of 2017, the living arrangement of Medicare beneficiaries was distributed thus; living alone (29.4%), spouse only (39.1%), spouse and others (11.5%), children only (6%), children and others (4.1%), others only (5.9%), and living with non-relatives (4%).

Race/ethnicity

  • 75% of Medicare beneficiaries are white, 10% are African American black, 9% are Hispanic.

Area of Residence

  • 79.6% of Medicare beneficiaries reside in urban areas, and 20.4% stay in rural areas.

Research Strategy

Your research team began its search by trying to find resources that credibly and directly provide the demographic profile of people on Medicare. In attempting to locate this answer, the started went over Medicare's official website to get any statistics on the typical people on Medicare. Also, the team conducted exhaustive research through national databases/portals and industry-related committees, organizations, and associations. In pursuit of this strategy, the team checked the databases of the Bureau of Labor Statistics (BLS), Census, KFF, AARP, and Data USA, among others. Also, the team conducted exhaustive research across statistic portals/databases and trusted media articles from Bloomberg, Statista, Deloitte, and IBIS World.

These inquisitions led the team to some requested demographic data on such as age and the income AARP. On KFF, the team obtained data for gender, race, income, and marital status. The requested data for education level was, however, unavailable. On MedPac, the team found a report published in 2017, which showed the education level for people on Medicare as of 2013.

To locate a more recent answer in terms of the education level, the team decided to change gears and use the information found before to triangulate the requested data. Since at the end of 2017, 15.5% of people on Medicare were under 65 years, 47.8% were between 65 and 74 years, and 36.7% are 74 years or older. The team calculated that 84.5% (47.8+36.7) are older than 65. Then, your research team assumed that this age group's demographic can be applied for people on Medicare. To find the education level for people on Medicare, the team looked for the education level of people older than 65 years by going through governmental databases/portals, as well as industry-related committees and associations. The team found a report showing that 13.7% of this age group (65+ years) have a bachelors degree as their highest degree.

Additionally, since 75% of people on Medicare are white, your research looked for the education level of white people assuming that this group's demographic could be applied to people on Medicare. By checking national databases such as Census, the team obtained the education level of white people in the US as of 2017
Therefore, since this group represents 75% of people on Medicare, your research team assumed that this breakdown applies for them as well.
Part
02
of three
Part
02

Medicare - Psychographics

The hobbies and interests of people on Medicare include watching television, socializing and communicating, relaxing and thinking, reading for personal interest, using computers, and playing games. Medicare users also enjoy traveling for fun. Long weekend trips, genealogical journeys, and multigenerational vacation top their bucket list.

Interests and Hobbies

  • According to the American Bureau of Labor Statistics, Americans aged between 55 and 64 years spend an average of 5.42 hours per day on leisure and sports activities while those aged over 65 years spend 7.50 hours, making an average of 6.46 hours.
  • Watching television accounts for an average of 3.2 hours of the time spent on leisure and sports activities for both groups.
  • Socializing and communicating comes in second at an average of about 1 hour followed by relaxing and thinking at 53 minutes, reading for personal interest at about 49.5 minutes on average, sports, exercise, and recreation at an average of about 23.5 minutes, computer use at about 20 minutes, and playing games at about 17.5 minutes on average.

Lifestyle

  • Senior Living defines 'seniors' in the United States as people aged above 65 years. However, it also provides some statistics that encompass people aged over 50 years.
  • It quotes a Pew Research report that states that about 20% of seniors do not retire because most of them do not possess savings for a comfortable retirement. Also, only 3.1% live in nursing homes while the majority of them prefer in-home assisted living.
  • A report by AARP states that an average baby boomer plans to take four to five fun trips in a year to rejuvenate, escape, and spend time with friends.
  • Long weekend trips, genealogical journeys, and multigenerational vacations such as family cruises tend to be on top in their "bucket lists." Additionally, about 12% and 50% of seniors have used dating sites and Facebook, respectively.

Opinions and Beliefs

  • According to Green Buzz, the Silent Generation, which comprises people born between 1925 and 1945 are cautious, compassionate, and conservative and are known for diligence and acceptance of the system.
  • Additionally, the Silent Generation is known to be disciplined, family-focused, loyal, responsible, and generous.
  • On the other hand, baby boomers have an affinity for physical fitness, leisure activities, and premium products because most of them can afford it.
  • They are also known for high spending, personal gratification, desire for involvement, and personal growth with a tendency to question everything.

Your Research team applied the following Strategy:

In order to provide the psychographics of people on Medicare in the United States, we began our research by examining esteemed websites such as Medicare and Centers for Medicare & Medicaid Services (CMS). However, these sites only provided demographic analyses of Medicare beneficiaries.

Next, we looked for precompiled reports regarding the said subject on academic studies and journals as well as marketing and business research resources such as Pew Research and Mintel, among others. However, we only found statistics on the usage of Medicare, but nothing on the psychographics of its users.

Our third strategy was to search for reports and articles on media sources such as The Washington Post, The New York Times, Reuter, PRNewsWire, and other similar websites. But, we were unable to locate the required information.

Having found no psychographic profile of Medicare users, we decided to build one based on the demographics of Medicare users. We used data from the CMS to determine the age range of most Medicare beneficiaries and then conducted research to highlight the psychographic profile of the age group in question. Our logic was that researchers considered both Medicare and Non-Medicare users in the United States while investigating the overall psychographics. Notably, we have included data for both baby boomers and the Silent Generation where there is no data specifically for the age group.
Part
03
of three
Part
03

Medicare Advantage - The Consumer Journey

The consumer journey for Medicare Advantage users usually starts in their 50s (when most users start thinking about Medicare). Key drivers in choosing a plan are cost, comprehensive coverage and convenience (e.g. ability to stay with a preferred doctor), whereas barriers to choosing are lack of understanding of plans, fear of costs and lack of adequate planning.

Many senior citizens do not learn about Medicare plans at all for different reasons, such as unpleasantness of the experience or timidity. Those who do tend to learn about plans online. The main reason for switching providers is lack of value for price, as well as other factors such as poor customer experience or more attractive options.

AGE

  • US citizens start thinking about Medicare in their 50s: a Nationwide Retirement Institute 2018 poll of affluent older adults suggest that people as young as 50 are already concerned about healthcare in their elderly years.
  • Accenture also pointed out that US 50-somethings are thinking about Medicare. Their 2018 Health Insurance Shopping and Enrollment Experience Survey found that 48% of surveyed 55 to 64 year-olds are already shopping around for Medicare.
  • However, there are still people who do not think about it until the very last minute. United Medicare Advisors suggests to start thinking about it, latest, a year prior to 65.

KEY DRIVERS

  • In choosing a Medicare Advantage plan, the biggest driver is cost. According to a 2017 survey by insurance brokerage firm Elite Insurance Partners Cost, for 43% of respondents affordable costs for doctor visits and prescriptions is the top reason to pick a plan.
  • Other reasons associated to cost are limit to annual out-of-pocket (37%), affordable premiums (36%) and having the option of a plan without a premium (25%).
  • Other drivers are medical and drug coverage combined into one plan (42%), ability to keep preferred doctor (33%), extra benefits (29%), attractiveness of plans with current insurer (9%) and ability to stay with current insurer (8%)

KEY BARRIERS

  • The most prevalent barrier towards choosing a Medicare plan is lack of understanding, both of individual or specific plans and of Medicare in general: 70% of respondents to the Nationwide Retirement Institute survey said they wish they understood plans better.
  • The survey also found that a third of respondents believe (incorrectly) that users cannot switch providers once you sign up, and that 23% of respondents believe users can sign up at any time.
  • Another barrier is fear over costs: 45% of respondents to an AARP survey said to be concerned they won't be able to afford healthcare, and 73% of Nationwide respondents listed "out-of-control" healthcare costs as one of their top fears in retirement.
  • The Nationwide survey found that 39% of respondents automatically associate healthcare with high costs, and 53% cannot estimate how much their annual costs in healthcare will be.
  • These two factors combined result in poor planning, which is an additional barrier: Nationwide found that 52% of respondents do not discuss healthcare planning with their financial advisor, and 32% have not talked to anybody at all.
  • AARP found that only a third of senior citizens shop for insurance plans — compared to 54% who shop around to save on groceries or 45% who shop around to for home or car insurance.

HOW DO PEOPLE LEARN ABOUT MEDICARE ADVANTAGE PLANS

  • In many cases, Medicare users do not learn about different Medicare plans. Nationwide found that almost a third of users or future users do not discuss possible plans with anyone.
  • 52% do not discuss it with their financial advisor because they consider the matter a private one.
  • Two-thirds of senior citizens do not look for information on Medicare plans, finding the experience unpleasant: 23% of respondents to AARP survey find the prospect of reviewing their plan more unpleasant than other tasks (including "getting a colonoscopy").
  • Of those who do tend to do so online: Accenture's survey found that over half of go online to shop around for Medicare plans (both Advantage and Original).

REASONS FOR SWITCHING PROVIDERS

  • Accenture's 2018 Health survey found that the top reason for Medicare users to switch providers is a lack of value for money, mentioned by 62% of respondents.
  • Other top reasons are less-than-appealing plan options (26%), would rather stay with a preferred doctor or hospital (11%), poor experience (7%), lack of trust in provider (5%), difficult to manage (4%), representatives not knowledgeable (3%) and digital services lackluster (1%).
  • Most respondents (56%) said that they would have stayed with their original provider if it offered better pricing. 21% said nothing could have made them stay.
Sources
Sources

From Part 02
Quotes
  • "In 2016 a Pew Research poll found that nearly 20 percent of seniors citizens hadn’t retired and were working full-time."
  • "The 2010 US census found that 3.1 percent of seniors were nursing home residents. Rather than move to a nursing home or assisted living, many seniors choose in-home care support. "
  • "Seniors are traveling for fun. AARP (the American Association of Retired Persons) reported that in 2015 the average baby boomer planned to take four or five trips. Primary reasons for travel were escape, to be with family and friends, and to rejuvenate. What sorts of trips to seniors tend to take? Long weekend trips are especially popular and often include “bucket list” items such as visiting a particular US city or landmark. Genealogical journeys are popular too. Ancestral research is increasingly common among US seniors who travel domestically and to Africa, Asia and Europe. Multigenerational vacations are increasingly popular as travel agencies promote group deals for airfare and vacation rentals. Seniors, their children and grandchildren tend to meet at resorts, take cruises or rent private homes for family reunions."
Quotes
  • "This generation was born from 1925 to 1946. They are known to be the cautious, conservative and “aware of others” generation. They were children during America’s worst economic conditions: the Great Depression and the Dust Bowl. This upbringing taught them the value of hard work and diligent saving. The silent generation is not known to “change the system”, but instead to “work within the system.”"
  • "They are also the generation to receive high levels of income, allowing them to make use of the benefits of abundant levels of food, apparel and leisure activities. This generation was viewed excessive by previous generations."
Quotes
  • "To be eligible for Medicare, an individual must meet one of the following requirements: being at least 65 years old being under 65 years old and living with a disability being any age with end-stage renal disease or permanent kidney failure that needs dialysis or a transplant"