In this series of posts, e123 President Brendan McLoughlin will explore how the incoming Trump administration may impact the health insurance landscape, and the measures health insurance marketers should take to prepare for this new reality.
As Donald Trump prepares for his second term, health insurance leaders should gear up for big changes in the Medicare landscape. Trump’s first presidency focused on market-driven reforms and the privatization of healthcare, and it’s safe to expect a continuation of those policies. For Medicare-focused insurers, the next four years could bring both challenges and opportunities, making preparation more critical than ever.
What Changes Could Be Coming?
Medicare Advantage (MA) becomes an Advantage
Medicare Advantage was a cornerstone of Trump’s first term, with deregulation and incentives driving enrollment to record highs. A second term could push MA further, potentially granting private insurers more flexibility to innovate with benefits and coverage options.
What Insurers Can Do:
Consider differentiating MA plans by offering stand-out supplemental benefits like dental, vision, or fitness programs.
Embrace technology to take control of the distribution side of the business. Many health plans and carriers focus mainly on product design, leaving member acquisition to the whims of the marketplace. Marketers who are strategically managing their revenue growth by leveraging distribution management technology are finding themselves with a big advantage when it comes to acquiring new, profitable members.
Cost Transparency in Medicare
Trump has a track record of championing transparency in healthcare pricing, and this initiative will likely extend further into Medicare. Insurers could be required to provide more detailed cost breakdowns to empower consumer choice.
What Insurers Can Do:
Begin auditing pricing structures now to ensure compliance with future transparency rules. Focus on clear, data-backed communication to show beneficiaries the value of your plans.
Potential Medicare Spending Cuts
A Trump Administration focused on fiscal conservatism could target Medicare for spending reductions. This could mean tighter provider reimbursement rates, stricter drug price controls, or scaled-back funding for traditional Medicare programs.
What Insurers Should Do:
Look into streamline operations now to mitigate the impact of tighter margins. Explore ways to optimize costs that not only focus on optimizing medical loss ratios (MLR), but also seek to reduce customer acquisition costs (CAC) and improve customer lifetime value (LTV).
The Ripple Effect of Short-Term Medical Plans
Trump’s previous deregulatory approach to short-term health insurance plans could return, reshaping consumer behavior. While not directly tied to Medicare, this shift could impact enrollment trends in Medicare and Medicare Advantage.
What Insurers Should Do:
Consider how short-term plans influence consumer decisions, especially in your MA markets. This insight might lead to a fine-tuning of product strategy leading into open enrollment.
Traditional Medicare Faces Challenges
The rapid growth of Medicare Advantage could leave traditional Medicare part A&B with a smaller, costlier risk pool. Premiums for traditional plans could rise, increasing dissatisfaction among those who remain. This could have a meaningful impact on the economics of Medicare Supplement plans as well.
For insurers with stakes in both MA and traditional Medicare, the challenge will be to balance growth in MA while maintaining a high standard of care.
What Insurers Should Do:
Invest in distribution management technology that will allow product teams to assess not only risk and benefit aspects of product performance, but also sales, renewal and disenroll data. Driving profitable growth is best achieved when product design and go-to-market tactics work together to strategically manage revenue.
Looking Ahead
The next four years could bring sweeping changes to Medicare policy, but they also present an opportunity for insurers to innovate, adapt, and lead. Insurers that take a proactive approach—leveraging data, actively managing their revenue growth, and staying ahead of policy shifts—will be best positioned to thrive.
Trump’s return to the White House will no doubt redefine the rules of the game. The question is: will you be ready to win?