A Bold Digital-First Strategy for Engagement, Improved Member Experience, and Lower Costs
By: John Reynolds, Ph.D. – President, Sunny Benefits
The following is the first blog in a three-part series entitled "Charting a Bold New Course for Medicare Advantage Supplemental Benefit Plans."
Summary: Medicare Advantage payers face financial challenges that amplify the need for transformative strategies to thrive in the evolving marketplace. Investing in a digital-first, mobile-enabled strategy will be imperative to achieving growth expectations and star-rating improvements in the future.
The Medicare Advantage (MA) market has been growing steadily for years and involves payers, care delivery partners, and technology companies. There has been a significant shift in the program over the past two decades. The Centers for Medicare & Medicaid Services (CMS) announced a 1.12% Medicare Advantage rate decrease for 2024, which equals a $150 reduction per member per year. This marks the first decline since 2015. Additionally, CMS has updated the risk adjustment model, resulting in an average 2.16% rate decrease, and star ratings payment rates will also decline by 1.24% on average. Payers will need to achieve savings through reduced medical costs, value-based care, lower administrative expenses, and changes in product design to enhance consumer experience, increase loyalty, and reduce costs.
Medicare Advantage payers’ financial challenges emphasize the need for transformative strategies to succeed in the evolving marketplace. Investing in a digital-first, mobile-enabled strategy is crucial to meet growth expectations and improve star ratings in the future. Despite emerging challenges in the Medicare program, Medicare Advantage is expected to be the most profitable line of business for payers in 2026 (Singhal, 2023). By making significant changes, such as increasing member engagement and reducing paper usage, payers can enhance their competitiveness in the future.
Today’s Medicare Advantage members are technology-savvy
In today's increasingly digital world, seniors 65+ are turning to their smartphones for everyday needs, including shopping, banking, and other forms of social media. According to the National Institutes of Health, 76% of seniors in 2023 own a smartphone, while 90% own a laptop or computer and use the internet regularly. Google’s consumer insights group found that 87% of online seniors use the web to organize their finances and 73% use digital services to manage their health and wellness. While some of today’s seniors may not have access to certain technologies, we cannot ignore that today’s typical senior is very comfortable using digital and mobile-enabled technology.
What does the digitally savvy senior want from their Medicare Advantage Supplemental Benefits offering? First, it’s time to quit believing your members are satisfied with a catalog-only option for their Over-The-Counter (OTC) supplemental benefits. Offering an online or mobile solution isn’t enough either. With today’s seniors going digital, Medicare Advantage members now expect to be able to view and access their supplemental benefits or rewards like they do any other financial product through a single digital, mobile-enabled platform linked to a single flexible benefit payment card. Medicare Advantage market research firms like Deft Research and ConnectureDRx have highlighted the importance of digital supplemental benefit platforms for Medicare Advantage member decision-making for >3 years, particularly with dual-eligibles (Medicare/Medicaid). Deft Research found that 48% of full duals who switched health plans in 2024 did so for a larger flex card allowance, and 33% of full duals switched to obtain other supplemental benefits. Finally, we should assume that dual-eligibles (and any MA members) will continue to switch at an increasingly higher rate if they don’t have access to a flex card and an accompanying digital and mobile solution.
Lowering Costs
There is a long-overdue rise in consumerism within our healthcare system. Medicare Advantage members are beginning to think about their healthcare, as with every other service they purchase daily. They expect increasing transparency about their benefits and ease of use for financial transactions. We believe this is a great, transformative thing, and it’s about time!
Today, payers and their members are too dependent on call channels and archaic methods of communication. To become a lean, consumer-first organization and deliver maximum value to members, payers must embrace digital-first member experiences to provide a state-of-the-art benefit and payment platform that is affordable and easy to use. In addition to delivering a transformative member experience, payers can substantially obviate call volumes and improve member communications. The cost savings are measurable and sustainable!
Let’s start with a bold solution built by experts to fuel your success.
At Sunny Benefits, we pride ourselves on our commitment to innovation and customer-centric solutions. Our digital-first approach ensures that we cater to all members' needs while embracing the latest technology to enhance their experience. By designing our solution from the ground up with seniors in mind, we aim to revolutionize how supplemental benefits are delivered in the Medicare Advantage landscape. Sunny Benefits is built on a modern, agile technology that creates streamlined experiences for all who interact with it. Sunny’s solution enables payers to compete and win with lower costs and more innovation against larger companies.
Sunny partners with payers like you to provide a digital-first, mobile-enabled benefit and rewards solution that improves the overall consumer experience, drives positive health outcomes, and reduces cost.
About the Author:
John Reynolds, Ph.D., has over 30 years of experience in healthcare services, benefits consulting, and financial technology. He is currently the President of Sunny Benefits. Most recently, Reynolds was president of Solutran, a division of UnitedHealth Group (Optum). Previously, he was President of FIS (Fidelity National Information Services, NYSE: FIS) Healthcare, Government, and Biller Solutions.
Reynolds is an Adjunct Professor at the University of Minnesota, teaching Healthcare Services Leadership. Previously, he was an adjunct professor at St.Catherine’s University, teaching healthcare economics and policy in their Masters of Business Administration (MBA) program. He has frequently spoken at national healthcare and financial services conferences, published numerous articles on consumer-directed healthcare, and co-authored the book, “Overdose: Your Health, My Money,” which explains the Affordable Care Act and its ramifications for the American public.
John Reynolds holds a Bachelor of Science in Economics from the University of Minnesota. He also has a Master’s in Management and Administration and earned his Ph.D. in Business, Organization, and Management.