Boomer loyalty: Insurers draw on a little help from their friends to market pre-Medicare coverage

Health plans are marketing hard to baby boomers, a generation that was once overlooked. Insurers hope the ties they establish now with this giant demographic group will transfer to their Medicare Advantage plans later.

By Emily Berry, AMNews staff. April 28, 2008.

With marketing campaigns complete with Beatles lyrics, vinyl records and classic cars, health plans are vying for the attention of a group that, by traditional logic, should be far-from-ideal customers.

Baby boomers, by virtue of their age, are more likely to have a "few chinks in their armor" that make them seem riskier to insure, said Jude Thompson, senior vice president for Indianapolis-based WellPoint and president of Anthem BlueCross BlueShield's individual business.

But despite their age, Thompson said, the group actually is the most profitable demographic among those who buy individual policies -- and perhaps more important, they have the potential to be valuable customers for the rest of their lives.

Whichever company they choose already has a leg up in the very competitive market for Medicare Advantage products.

To win their loyalty, insurers aren't waiting for boomers to turn 65 and become eligible for Medicare. They believe it's better to start now by capturing the attention of early retirees, business owners and others who need to buy their insurance directly.

"The competition for the senior today is greater than it's ever been," Thompson said.

Health insurance in general is a "sticky" product, meaning consumers are prone to keep the status quo, and Medicare Advantage has a retention rate "north of 90%," said David McNichols, general manager of individual Medicare products for Cigna.

At least so far, boomers are brand loyal, WellPoint's Thompson said.