A perfect storm is brewing on the health insurance horizon. One part Medicare privatization, one part baby boomer generation, and one part proliferation of online seniors, this storm has health insurance agents across the nation gearing up for a revolution. Simply put: The industry's next big opportunity will be a silver one -- and it will be online.
Next year, the first baby boomer will turn 65 and become Medicare-eligible. And, the other 72 million Americans of this generation are walking close behind. As they enter the senior category throughout the following 20 years, they will fundamentally change its makeup and, consequently, that of the health insurance industry.
The times, they are a changin', and insurance agents need to make sure they stay on top of them, lest they miss the one of the biggest opportunities of their careers.
The first challenge for most health insurance agents and brokers is to abandon outdated notions about today's seniors. The senior category has been rapidly modernizing in the last few years, specifically in regards to technology.
A new analysis by the Pew Research Center in Washington shows that since 2005, the 70- to 75-year-old population has registered the most significant increase on the Internet. "While just over one-fourth (26 percent) of 70- to 75 year olds were online in 2005, 45 percent of that age group is currently online," reports the Pew Internet and American Life Project. Most often, they are logging on to use e-mail, but a growing number of seniors are now using instant messaging and social networking as well.
According to the Pew Center, "Wired seniors are often as enthusiastic as younger users in the major activities that define online life, such as e-mail and the use of search engines to answer a specific question. Also, wired seniors are as likely as younger users to go online on a typical day."
If you find these numbers impressive, just wait until the boomers join their ranks. Baby boomers favor technology even more than their predecessors, especially since many of them helped develop the Internet community.
Another Pew Internet and American Life Project study released last year reported that boomers turn to the Internet in wide numbers to research, browse and shop, and that they are quickly catching up to Generation X and Generation Y in their online participation.
Here are some facts revealed by the report:
The search for health insurance
- Older boomers. Americans age 55-63 make up 13 percent of the American adult population. This vanguard of the baby boomer generation also makes up 13 percent of the American Internet-using population.
- Younger boomers. Americans in the 45-54 age range make up 20 percent of the American adult population. But these younger boomers account for 22 percent of the Internet-using population. That nearly matches the Generation X adults who follow them.
- Silent Generation. More than 45 percent of seniors in the 70-75 age range now use the Internet. That's nearly double the Internet usage for that same age group in 2005.
Along with banking and travel, the most popular search terms used by online seniors are "health insurance" and "Medicare." Research shows that American seniors are specifically turning to the Internet to look for health insurance guidance, assistance and coverage.
Moreover, well-positioned agents and brokers are increasingly leveraging the Internet to reach new customers and assist current ones. Whether it's online quoting engines or customized Web sites, a major transformation is taking place in how people buy and sell health insurance.
Changing face of Medicare
There is no doubt that the quickly evolving health care landscape is also contributing to this revolution.
Consider that nearly a fourth of all seniors -- 8.3 million in total -- are currently enrolled in the Medicare Advantage program, according to the Kaiser Family Foundation, and that an additional 17.4 million seniors purchase Part D prescription drug coverage plans. Combine that with the fact that Medicare now subsidizes even more private-carrier plans, and seniors have effectively become the fastest growing health insurance segment.
Seniors now applying for Medicare have the option of choosing individual health and supplemental coverage from private carriers. Even retirees previously covered by their former employers are being encouraged, if not forced, to enter Medicare.
It's hard to predict how much the current overhaul of our health care system will affect this major insurance source for seniors, but it's bound to drive them online in ever increasing numbers, whether to keep informed or shop carriers and get new quotes. Agents who are equipping themselves now with the right tools and knowledge will be in a unique position to handle this exploding market well before it crests.
If nothing else, simply consider the latest Census Bureau figures that estimate that by 2050, the senior population will hit 86.7 million people -- an overwhelming increase of about 128 percent from today.
There is no doubt that this coming tide is an absolute boon for insurance agents -- particularly the internet-savvy segment with the right tools and resources to capture this incredible opportunity. The question is, are you one of those agents?
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