Nestled between a pancake restaurant and a hair salon in a strip mall in Oak Lawn is a store just for seniors.
UnitedHealthcare, the nation’s largest health insurer, on Thursday opened what it calls a “Medicare Store” in the southwest suburb, its first in Illinois. Licensed insurance agents are on hand during open enrollment to explain the company’s health and prescription drug coverage for individuals 65 and older.
Selling health insurance the way Apple sells iPhones is a novel concept for carriers. That’s because many consumers have insurance through their employers and don’t have to shop for medical policies like they do home or auto insurance.
But the senior market is a different story. The environment for Medicare is changing rapidly. Fifteen years ago the vast majority of seniors were enrolled in traditional Medicare and only had to decide whether to buy supplemental insurance to pay for health costs the federal government didn’t cover.
Today more than 30 percent of the nation’s Medicare population is enrolled in health plans sold by private companies. The plans, known as Medicare Advantage or Part C, usually offer prescription drug coverage (Part D) and other benefits like vision and dental coverage.
With enrollment soaring, Medicare has become big business for insurance companies. Aetna cited Humana’s strength in the Medicare Advantage market as a key reason in its pursuit to acquire the company.
Seniors face a myriad of plan choices, including HMOs and PPOs, with different provider networks, benefits and out-of-pocket costs. In Cook County alone, there are 26 plans offered by eight companies, according to the Centers for Medicare & Medicaid Services.
Even if seniors stay with traditional fee-for-service Medicare, they can choose among a variety of prescription drug and supplemental plans.
“Seniors say they find the process of selecting a plan to be frustrating, confusing and overwhelming,” said Gretchen Jacobson, associate director of Medicare policy at the Kaiser Family Foundation.
UnitedHealthcare would like to make the process easier and more convenient with the storefront, said Maggie Del Real, vice president of sales.
“They get so much information from all different carriers,” she said. “This is where we feel this type of setting will help them.”
The retail concept flashes back to the days when insurance agents made sales pitches at the kitchen table. In 2011, UnitedHealthcare first opened Medicare stores in other cities and has found that some seniors still enjoy doing business one-on-one, Del Real said.
Carriers are focusing on customer service as other parts of the medical insurance market become more consumer focused thanks to the Affordable Care Act. More people are shopping for individual policies on public exchanges set up under the health care law.
This year, UnitedHealthcare will have 16 stores around the country during Medicare open enrollment, which begins Oct. 15 and runs through Dec. 7. Most of them are temporary, like the one in Oak Lawn.
Illinois is a huge Medicare market for carriers, with an estimated 2 million people eligible for the government-sponsored insurance, including about 777,000 in Cook County, UnitedHealthcare said. But insurers have had a hard time cracking the market. There are 371,007 individuals enrolled in Medicare Advantage plans, representing 18 percent of the Medicare population, according to Kaiser.
UnitedHealthcare is the largest player in the Illinois Medicare market, with 39 percent market share. In Cook County, the company is No. 2 behind Humana.
The company chose Oak Lawn because it borders Chicago and is accessible, Del Real said. The store, at 4710 W. 95th St., is on a busy street with several shopping centers.
The village itself is a prime recruiting ground for insurers. Eighteen percent of its population is 65 and older, according to 2010 census figures. In Illinois, 12.5 percent of the population is Medicare eligible.
UnitedHealthcare is going after people who just turned 65 as well as seniors on traditional Medicare who have never considered private plans. The store will have agents fluent in Spanish and Polish to cater to those ethnic groups.
Kaiser has found that seniors who have Medicare Advantage or supplemental plans rarely change policies, Jacobson said.
“They’ve told us that if their plan is currently working for them and isn’t greatly changing from one year to the next they like to stay with the same plan,” Jacobson said.
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