Medicare Advantage Plans Are Increasingly Popular, and This Growth Is Spurring Competition That Benefits Both Consumers and Insurers
Medicare Advantage’s growing popularity spurs competition that benefits both consumers and insurance providers. Melanie Musson, an insurance expert with InsuranceProviders.com, says, “Insurance companies should take the competition of the growing Medicare Advantage market as an incentive to improve efficiency and productivity.”
According to America’s Health Insurance Plans (AHIP), more seniors are opting for Medicare Advantage plans over Medicare Parts A and B, otherwise known as Original Medicare, than ever before. Every year, the ratio between these two options steadily shifts toward Medicare Advantage.
With this increase in consumers choosing Medicare Advantage, insurance competition has risen. Most people understand that competition is good for the consumer. But they may not realize how competition benefits the provider in positive and powerful ways.
Competition Spurs Efficiency
Competition forced providers to streamline their processes. When a Medicare Advantage insurance provider has to try to attract clients who have a variety of comparable options, the provider can’t waste resources on unnecessary things.
So, the providers must become more efficient in their operations and policy offerings. The things that should be primary must be primary in stiff competition. As a result, Medicare Advantage average premiums have decreased this year despite most of the economy experiencing high inflation.
The reduction in premiums certainly benefits the consumer, but it also initiates a benefit to the providers as they reduce their operating costs and improve efficiency.
Competition Forces Growth
Another way that competition benefits insurance providers are by pushing new areas for growth. There are rural counties in the U.S. where Medicare-eligible consumers don’t have access to medicare Advantage services. As providers look for new avenues for growth, they’re seizing the opportunity to expand into rural communities.
This expansion benefits consumers by giving them healthcare options, and it helps providers by contributing to business growth.
Competition Is a Win for Consumers and Providers
While competition is challenging, it’s good for everyone involved. For example, in the car insurance market, consumers know they’ll find the best price when reviewing competing car insurance rate quotes. And Medicare consumers can get better coverage for a better price when there is competition between plan providers.
But the competitors also experience the benefits of competition. For example, competitors in a race do better when they prepare for and face stiff competition. Similarly, competitors in the insurance marketplace are pushed to be their best when competing with other strong contenders.
Article by Melanie Musson
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