Have you taken a long hard look at your Medicare Marketing strategies for 2016? We know, AEP is barely over, the dust hasn’t even settled yet, so why is KERN sending me this notice about 2016 Medicare Marketing now? We are starting this conversation now, because this conversation needs to be had now. Nearly ½ of AEP will be severely impacted by the election media placement. 45% of AEP will take place during the Presidential Election firestorm of television and cable television advertising. There are 54 Days of AEP and 24 of those days will take place during the Presidential Election Television commercial blitz. There is a new senior in town. And they’re not only identifiable by their age. Other factors, are critical to segmenting the new Faces of Medicare in 2016, as the population moves from the Greatest Generation to leading edge and trailing edge Baby Boomers, who behave much differently than the Seniors that most Medicare Marketers are prepared for. Are you so sure of your Medicare Marketing strategies and plans for 2016 that you are willing to bet everything on the fact that not much will change? What could go wrong? We see a huge shift in the Medicare Market audience. We see a digital savvy consumer that spends more time online and on social networks than the previous audience of Seniors. We see Medicare marketing organizations that are turning a blind eye and a deaf ear to this enlightened, technology accepting audience by planning the same old Print, DM and TV marketing, and pretending that digital adoption by the new Faces of Medicare isn’t a real thing. Don’t bet the farm on the same old story. Visit http://kernagency.com/health/ to learn more.

1. MEDICARE MARKETING 2016:
RETHINKING
YOUR STRATEGIES
kernagency.com/health | (818) 703-8775 | info@kernagency.com

2. MEDICARE MARKETING 2016:
RETHINKING YOUR STRATEGIES
Over the past few years, an empowered and emboldened consumer
has caused marketers to respond to a new dynamic. In the Age of the
Consumer, we are living a marketing reality that requires a new set
of strategies, objectives and tactics. Medicare marketers who take a
“Business-as-usual” approach in this new climate are flirting with
disaster.
THE CONVERGENCE OF 4 MAJOR
FORCES IN MEDICARE MARKETING IN
2016 IS THE CATALYST FOR CHANGE.
In 2016, there is a “perfect storm” of 4 major forces that will significantly
impact marketers who are focused on developing programs for Medicare
prospects and members:
1. The Impact of the 2016 Election
2. The New Faces of Medicare
3. The Competitive Landscape and the Proposed Consolidation of
Health Payers
4. The Emergence of Medicare Marketing Megatrends
Saying that 2016 will be an action-packed year for Medicare marketers
is a gross understatement. Let’s take a closer look at the waves of change
that must be considered, confronted and planned for.
THE IMPACT OF THE 2016 ELECTION
ON MEDICARE MARKETING
With political coverage of Medicare in the news nearly every day,
consumers will find themselves confused and overwhelmed. Many are
unable to separate the political posturing and positioning from actual
data, despite the fact that, regardless of how they play out, these political
issues will not be resolved until 2017.
Political ideas regarding Medicare run the gamut from expanding
Medicare coverage for the entire U.S. population to overhauling the
system and abolishing Medicare completely.
Politics aside, the real issue for Medicare marketers is how the election
will impact media availability during AEP.
45% OF
AEP WILL
TAKE PLACE
DURING THE
FIRESTORM OF
TELEVISION
AND CABLE
TELEVISION
ADVERTISING
DURING THE
PRESIDENTIAL
ELECTION.
2

3. If you’re thinking about reusing the same 2015 television budget for your 2016 AEP, think again. Nearly half of
AEP will be severely impacted by election media placement. There are 54 days of AEP. Twenty-four of those will
take place during the presidential election television commercial blitz.
In a recent article in USA Today, Kip Cassino, executive vice president for market research company Borrell
Associates, is quoted as saying, “In some of these [swing] states, there’s literally going to be no available
advertising space left on television. The local TV stations are literally going to have to turn down ad spending.”
The article goes on to state that “cutting through the clutter will be harder later,” presenting a direct conflict
with AEP timing and causing a “bottleneck” of media to be run in the 30 days of non-election television. This
bottleneck introduces a compressed competition between plans to break through even more clutter than usual in a
dash for the finish line in a 30-day sprint.
THE COMPETITIVE LANDSCAPE AND THE PROPOSED
CONSOLIDATION OF HEALTH PAYERS
While the Aetna-Humana and Cigna-Anthem mergers are certainly top of mind for marketers who work at those
companies­—and perhaps for those who compete against them—the proposed mergers can’t possibly be approved
before 2017. Therefore, they pose no threat of directly impacting the 2016 Medicare marketing season.
THE REMAINING 22% AND “THE MAGNIFICENT
MEDICARE SEVEN”
Considering Medicare Advantage enrollments of market leaders, only seven companies account for nearly three-
quarters of enrollments for the entire market. If we put the mergers and acquisitions on the shelf for the sake of
discussion, 73% of Medicare Advantage members belong to these Magnificent Medicare Seven companies with
other national insurers holding another 5% and the rest of the market holding the remaining 22%.
23% - United Healthcare
19% - Humana
13% - BCBS Affiliates
8% - Kaiser Permanente
22% - All Others
EARLY 2016 MEDICARE ADVANTAGE ENROLLMENT
7% - Aetna
6% - Other National Insurers
3% - Anthem
3% - Cigna
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4. In a recent article, Bob Herman of Modern Healthcare detailed
the 2016 AEP acquisition increase by payer. UnitedHealthcare,
which is currently the largest insurer, added 14,600 Medicare
beneficiaries during 2015 AEP, more than any other insurer.
Humana enrolled 11,500 Medicare Advantage beneficiaries and
Kaiser Permanente was close behind at 11,400. Following were
Cigna with 4,000 and Aetna with 1,300. Centene Corp., Health
Net and Molina Healthcare have lost the most Medicare members
since the 2016 enrollment period ended with each insurer losing
more than 2,000 members.
According to the article, as of December 2015 there were 17.76
million seniors and disabled people enrolled in a Medicare
Advantage plan. Herman asserts, “There were also 24.27 million
people with a Medicare Part D prescription drug plan as of
December 1, a 3.1% bump from a year ago, according to CMS data.
UnitedHealthcare, Humana, CVS Health and Express Scripts
Holding Co. control 70% of the Part D market.”
THE NEW FACES OF MEDICARE -
ELIGIBLE MEMBERS
About 40 million Americans are 65 and older, which accounts for
13% of the U.S. population. By the year 2030, ALL baby boomers
will have turned 65, and the senior population in the U.S. will
grow to over 20% of all Americans. At that time the median age of
Americans will increase to 39.6 years, up from 37.2 today. That’s a
significant increase from just under 30 in the 1960s and ’70s.
Baby boomers are greater digital adopters than their predecessors.
In 2016, digital lifestyle is now the norm for the New Faces of
Medicare. The facts keep piling up in support of just how much the
faces of Medicare-Eligible members are changing.
Looking at projected growth over the next three years in the
number of 65-year-old-and-older Internet users, we can see a
steady increase to nearly 7 million more people than in 2015.
When you consider the enrollment numbers of Medicare
Advantage members (which was 17.76 million as of December
2015), and you realize that there will be an increase of nearly
7 million 65-and-older Internet users by 2018, those 7 million
people would account for nearly 18% of the total amount of
Medicare Advantage users today.
Does your digital budget for 2016 sit at 9% higher than it did
for 2015? According to these projections, it should since in 2015
30.5 million 65+ people were using the Internet, and in 2016,
9% more, up to 33.4 million, will be using it. Projections show
in 2018 there will be 37.3 million people 65 and older using
the Internet. That’s an increase of 22% in the total addressable
market in only three years.
Nick and Bobbie Ercoline
were dating at the time of the
Woodstock concert in 1969 and
didn't know their photo was being
taken. Later they got married
and have been together for over
47 years and are now proud
grandparents. Their photo, which
appeared on the cover of the
Woodstock album, defined their
generation. Coincidentally, Nick
and Bobbie are 65 this year.
BABY BOOMERS ARE
GREATER DIGITAL
ADOPTERS THAN THEIR
PREDECESSORS.
4

5. Medicare marketers who ignore the shift of boomers coming into the
market will be at a significant disadvantage to those Medicare marketers
who try to find a way to make Medicare appear “cool” to the New Faces of
Medicare.
THE EMERGENCE OF MEDICARE
MARKETING MEGATRENDS
1. The Audience Has Changed and So Must Marketers
The most significant megatrend is that the Medicare audience is changing.
There is a new senior in town. They’re not only identifiable by their age.
Other factors are critical to segmenting the New Faces of Medicare in
2016, as the population moves from the Greatest Generation to leading-
edge and trailing-edge baby boomers who behave much differently than
the seniors that most Medicare marketers are prepared for.
We see a digital-savvy consumer that spends more time online and
on social networks than previous seniors. But we also see Medicare
marketing organizations ignoring this enlightened new group of seniors
by planning the same old print, DM and TV marketing, and pretending
that digital adoption by the New Faces of Medicare isn’t a real thing.
As society and our audience move from traditional to digital media,
Medicare marketers need to create new media and budget strategies.
Most are not likely to be wildly successful out of the gate considering that
constant reevaluation and optimization on the fly during a compressed
AEP might prove to be difficult without a seasoned and experienced
marketing agency partner.
2. New Member Acquisition: Balancing Age-In and AEP
Acquisition Strategies
Knowing that new member acquisition is the important lifeblood of any
insurer’s success, Medicare marketers are struggling to decide which is
the greater pot of gold: age-in, with 10,000 people in the U.S. turning 65
every day, or AEP, during which multiple research documents show only
27.2
2014
Internet Users, Ages 65+ (Millions)
INTERNET USERS BY AGE | UNITED STATES | 2014-2018
30.5
2015
33.4
2016
35.9
2017
37.3
2018 9% INCREASE
According to projections,
digital budget for 2016
should sit at 9% higher
than it did for 2015.
37.3 MILLION
According to projections,
37.3 million people 65
and older will be using
the internet in 2018.
BABY BOOMERS
We see a digital-savvy
consumer that spends
more time online.
5

6. 10% of the Medicare Advantage enrollees opt to switch at all. Should Medicare marketing organizations put their
resources and emphasis on age-ins or on AEP?
And continuing with the acquisition theme, Medicare marketers are beginning to wonder what is actually within
their control. Are they vying for a piece of the 22% of Medicare Advantage enrollees in AEP? Do they really have
any hope of denting the acquisition numbers of the Magnificent Medicare Seven?
3. Medicare Strategies for Those Who Work Past Age 65
What about the increasing number of seniors delaying retirement, keeping their workplace insurance and
entering the Medicare market late? Organizations must have strategies in place to attract and acquire members
of this increasingly growing segment. Do you have the ability to identify and engage these important prospective
members? Best-in-class organizations either have or plan to have strategies in place to do so for 2016 and beyond.
4. Marketing Owns Customer Experience
Customer experience is now of paramount importance to Medicare marketing organizations. From the moment a
prospective member becomes aware of your organization or has an interaction with your organization, each and
every touch point is vital. Something as simple as a planned and cohesive customer-experience process can be the
difference between a lifelong member and a fleeting prospect.
2016 AEP MEDIA MIX
What’s your new media mix strategy for 2016?
TELEVISION RADIO DIRECT MAIL NEWSPAPER
MAGAZINE ALT MEDIA PORTALS NETWORKS
PRE-ROLL OTT VIDEO ENDEMIC SITES RTB PLATFORMS SOCIAL MEDIA
NATIVE ADVERTISING SEARCH DISPLAY RE-MARKETING
6

7. 5. Retention and Loyalty Transition of Legacy Members
Since insurer members are most likely to remain with the same insurance
company when entering Medicare, those insurers should be ready to
fight to keep those legacy members through extraordinary retention and
loyalty efforts.
6. Star Rating System
Medicare marketers are struggling with the importance of the star rating
system and are grappling with the actual importance of a 5-star rating
as it pertains to acquisition efforts. An organization’s star rating is a
direct reflection of its level of professionalism in providing an excellent
customer experience across all touch points.
7. New Media Strategies Are Needed
In the Age of the Consumer, Medicare marketing organizations must
adapt and evolve to remain relevant and effective. New marketing
positioning and messaging must be compelling to the enlightened and
empowered consumer. Marketers must be creatively digital and mobile
in their thinking, and adapt to a rapidly changing audience’s new media
consumption habits.
8. Medicare Is Changing
According to an ABC News website article from January 4, 2016,
“Whether it’s coverage for end-of-life counseling or an experimental
payment scheme for common surgeries, Medicare in 2016 is undergoing
some of the biggest changes in its 50 years. Grandma’s Medicare usually
just paid the bills as they came in. Today, the nation’s flagship health-care
program is seeking better ways to balance cost, quality and access.”
9. New Perceptions of Life Expectancy
There are significant new megatrends in elder healthcare. From connected
healthcare to virtual doctor visits, we have entered what some are calling
the longevity economy, where 60 years old is the new 40.
Life expectancy has risen to a little over 78 years, which some will
attribute to many new life-extension procedures. Just recently, Medicare
announced there may be a program developed to support physicians with
end-of-life counseling.
CUSTOMER
EXPERIENCE
is now of paramount
importance to Medicare
marketing organizations.
NEW STRATEGY
Medicare marketing
organizations must adopt
and evolve to remain
relevant and effective.
LIFE
EXPECTANCY
60 years old is the
new 40.
7

8. 10. Simplifying the Complex is Essential
Some megatrends are not new, such as attempting to solve the
complexities of Medicare through simple and concise communications.
Consumers have always been overwhelmed by the complexities of making
an informed decision regarding their Medicare coverage. Let’s face it, it’s
never been an easy or simple explanation regarding plan choices, and
marketers must strive to make the complex simple.
And without a doubt, the greatest megatrend that Medicare marketers will
need to deal with is the New Faces of Medicare-eligible members.
A MEGATREND
Medicare marketers will
need to deal with the
New Faces of Medicare-
eligible members.
MAKE SIMPLE
Consumers have always
been overwhelmed
with the complexities of
Medicare coverage.
8

9. The Impact of the 2016 Election on Medicare Marketing
With 45% of AEP occurring simultaneously with the finale of Election 2016, television is nearly off the table, and
other media options are going to be more expensive than in non-election years. Reusing the 2015 media plan is
not viable.
The Competitive Landscape and The Proposed Consolidation of Health Payers
The Magnificent Medicare Seven (UnitedHealthcare, Humana, Blue Cross Blue Shield Association, Kaiser
Permanente, Aetna, Cigna and Anthem) have a combined Medicare Advantage market share of 73%. When other
national insurers controlling 5% are added, that market share rises to 78%, leaving only 22% for ALL OTHERS.
With consolidation looming in the future, the competition will never be fiercer than in 2016. Ignoring the
competition in 2016 is not an option.
The Emergence of Medicare Marketing Megatrends
Megatrends impact the way business is done.
1. The Audience Has Changed and So Must Marketers
2. New Member Acquisition: Balancing Age-In and AEP Acquisition Strategies
3. Still Working at Medicare Eligible Age Strategies
4. Star Rating System: Marketing Owns Customer Experience
5. Retention and Loyalty Transition of Legacy Members
6. Media Megatrends-Digital is a Must Have-Social Media Becomes a Vital Channel
7. Medicare is Changing
8. New Perceptions of Life Expectancy
9. Simplifying the Complex Is Essential
In 2016, resources and strategies to attract available market share must include a new media strategy, new
retention, loyalty and transition strategies, and new positioning and messaging to successfully accomplish their
organizational goals.
SUMMARYWHY BUSINESS AS USUAL IS NOT AN OPTION FOR MEDICARE MARKETERS IN 2016
9

10. The New Faces of Medicare - Eligible Members
Shifting from traditional toward digital, this year’s crop of Medicare-eligible members will bring a decidedly
different flavor to most organizations’ Medicare marketing efforts. Content created in previous years will no
longer be relevant or compelling to this new class of market entrants. Collateral, ads, event materials and possibly
even event selection and focus will need to evolve to meet the needs of and gain awareness, consideration and,
ultimately, business from the New Faces of Medicare-eligible members.
New faces, new trends, new strategies, a new media mix, new data models, new personas, new messaging and
positioning, new creative and a whole new way of thinking will cause many Medicare marketing organizations to
feel more overwhelmed than the seniors grappling with understanding Medicare options.
New Partner for the New Faces of Medicare
KERN Health is an Omnicom agency. We provide best-in-class Medicare and senior marketing to the health-
insurance industry.
We’d love to be your new partner.
KERN understands the distinguishing characteristics of the senior audience as our expertise in strategy,
creative, data, analytics, production, activation and media planning is leveraged to achieve your immediate
member-acquisition marketing goals and to support your long-term strategies for building brand awareness and
membership advocacy. We’d like to invite you to contact us now to learn more.
kernagency.com/health | (818) 703-8775 | info@kernagency.com