Reprinted from HEALTH
PLAN WEEK, the most reliable source of objective business, financial
and regulatory news of the health insurance industry.
By Judy
Packer Tursman, Senior Reporter
September 18, 2017 Volume 27
Issue 32
Amid the Trump administration’s dramatic funding cuts for
Affordable Care Act (ACA) exchanges’ marketing and enrollment outreach, at
least one major insurer is stymied in its efforts: As of mid-September, Molina
Healthcare, Inc. hasn’t completed marketing plans for an open-enrollment season
set to begin Nov. 1. “We don’t release our marketing/advertising budget or
strategy information and there’s still so much uncertainty surrounding the ACA
that we don’t have finalized plans,” Molina spokesperson Sunny Yu told AIS
Health on Sept. 13.
Yet Blue Shield of California stresses its heightened focus on
marketing this fall, especially given the need to push past bad publicity about
plan exits and an unstable marketplace. “Our marketing efforts this year
include increased television, radio and billboards. We’re also doing more
videos on Facebook and other social media channels,” Clinton McGue, a
spokesperson for the Blues insurer, told AIS Health on Sept. 13.
Industry consultants warn that it all adds up to a season of
difficult marketing challenges that may require creative strategies to
overcome. CMS said Aug. 31 that it intends to slash ACA exchange advertising by
90%: from the $100 million spent a year ago by the Obama administration for
2017 open enrollment to about $10 million this fall. CMS also said it will pare
down grants to navigator programs, used to provide in-person enrollment
assistance, by about 40%: to just shy of $37 million, down from nearly $63
million a year ago.
Marketing Is ‘Crucial Investment’
“It’s shaping up to be a tough year [for 2018 exchange marketing],
and the combination of the loss of the CMS advertising, the noise around the
ACA, continued lackluster enforcement of the mandate — none of that is good for
exchange enrollment,” says Michael Adelberg, a principal with Faegre Baker
Daniels Consulting in Washington, D.C.
Adelberg also cites “premium increases tied to CSR uncertainty, a
shorter open enrollment season [from Nov. 1 to Dec. 15 for federally
facilitated marketplaces, no longer Jan. 31], insurers giving lower commissions
to agents and brokers — and a lot of state-based marketplaces have tight
budgets and limited outreach resources.”
“Except for the uncertainty surrounding CSR, health plans
generally know where they need to be on rates and benefits,” adds Adelberg, a
former senior official in CMS’s Center for Consumer Information and Insurance
Oversight (CCIIO).
The Trump administration’s recently announced intention to slash
funding for the 2018 ACA marketplace is being met with resistance by some
exchanges. Covered California released a 98-page report on Sept. 13 describing
marketing and outreach as “crucial investments” to promote enrollment in the
individual market.
Covered CA Boosts Its Ad Budget
In August, Covered California’s board approved a roughly $5
million year-over-year boost to the state-based exchange’s marketing and
outreach budget for 2018, now totaling $111 million.
The additional funding is being used to increase the number of
television and radio ads around key dates throughout its upcoming
open-enrollment period from Nov. 1 through Jan. 31. And the exchange will
conduct what it describes as a “more robust regional marketing direct-mail
campaign” for consumers to be affected by the exchange’s CSR surcharge to
silver tier plans (HPW 8/7/17, p. 6) — unless Congress
acts to extend CSR payments by Sept. 30.
“California’s experience shows that a stable individual insurance
market does not just happen on its own — investments in marketing and outreach
attract a healthier risk pool, lower premiums and encourage health insurance
companies to participate in the market with more certainty and potential
returns,” the exchange says.
According to Covered California, the federal government is “on a
path to dramatically underspend on marketing and outreach — with the investment
plans for 2018 being one-tenth of Covered California’s spend.” The report notes
the purpose of the federal government’s health plan assessment of 3.5% of
premiums paid on the federally facilitated exchange is to cover marketing and
outreach to promote viable marketplaces and operations.
CMS estimates the federal government will collect $1.2 billion in
plan assessments for calendar year 2018, Covered California’s report says,
which means that the planned 2018 federal spending of $47 million to promote
marketing and outreach for 39 states “is one-tenth of the $480 million it would
be spending if it spent the same percentage of premium on marketing as does Covered
California.” If the federally facilitated marketplace made this investment over
three years, the report says, “it would likely pay off with more than two
million more Americans getting insurance, premiums that are 3% lower and higher
participation of health plans, all with over a 400% return on investment.”
On the other hand, if the federal government goes ahead with its
planned reduction in national marketing and outreach spending, Covered
California estimates there will likely be “one million fewer Americans getting
insurance, [and] a less healthy risk pool in premiums that will be over 2.5%
higher in 2019 (representing a premium increase for those remaining insured of
$1.3 billion).”
The notion of investing adequately in 2018 exchange marketing and
outreach is echoed by Blue Shield of California. It is one of Covered
California’s participating plans, with a total exchange enrollment of 352,948,
including individual policyholders and small business.
“Blue Shield of California is committed to Covered California and
its goal of keeping California’s market stable for individual and family plan
members,” its spokesman McGue says. “To reinforce our commitment to the strong
and viable California exchange market, Blue Shield is increasing its marketing
efforts during this year’s open enrollment period. Our increased marketing is
also intended to minimize any confusion caused by Anthem Blue Cross pulling out
of a large part of the state.”
Insurers ‘Have to Get Creative’
Industry consultant Rosemarie Day, founder and president of Day
Health Strategies LLC, notes that the Trump administration is not only
decreasing ACA exchange navigators’ funding — but as of Sept. 12 apparently
hadn’t completed contracts for organizations still being funded.
“I don’t know that insurers can make up the difference, but there
are things they can do,” says Day, who was founding deputy director and chief
operating officer of the Massachusetts Health Connector, a state-based model
for ACA exchanges.
The “low-hanging fruit” for plans is retaining current enrollees,
because there is significant turnover in the individual market, Day says.
Also important is plans’ outreach to the newly uninsured, “and
this is where insurers have to get creative,” Day says. “It’s hard for me to
know the ROI [return on investment] on this, but insurers could do blanket
advertising for open enrollment with a message that might capture folks who
don’t need to go to the exchange,” thus leveraging spending in other areas of
their business.
Day explains that the idea is for the plan to build on what it is
doing for related markets to send out messaging more broadly and disseminate
information cost effectively. This might involve combining messaging to
individuals and small businesses — or perhaps the individual market and
Medicare.
Moreover, she says, plans ought to consider teaming up with
pro-ACA groups like Indivisible that are trying to get the word out on exchange
enrollment through social media — or at least be aware of what such groups are
doing. She says insurers also might try to get local media coverage on their
efforts, thus perhaps getting out the message free of charge about exchange
enrollment.
If plans opt to stay in exchanges for 2018 amid exits, Day says,
“From the insurers’ perspective, they should play it to the hilt: ‘We’re here
for you.’ Very positive.”
“I don’t want to suggest this will make up for the loss of
[marketing and outreach] funding at the federal level” or lost navigator money,
Day says, adding that insurers with Medicaid experience likely have more
expertise and ability to make up for some of the navigators’ shortfall.
Broadly speaking, “[I]nsurers have to think about every marketing
channel they’ve got and think about leveraging them,” she says. Also, given the
shorter open enrollment period for federally facilitated exchanges this fall,
plans should be “making it clear, getting rid of the noise about the
[marketplace] uncertainty and creating urgency around the earlier deadline,”
she says.
Down the road, absent sufficient federal money for marketing and
outreach, plans may have to build in some advertising money into their rates,
she says. “We may be recalibrating here for a ‘new normal.’”
As for this fall, Day says, “I think it’s tough right now because
we don’t know what’s happening with CSRs and what will happen with insurers’
rates. But that shouldn’t hold up advertising.”
Read Covered California’s marketing report at http://tinyurl.com/ydg8l9dv.
https://aishealth.com/archive/nhpw091817-01?utm_source=Real%20Magnet&utm_medium=email&utm_campaign=117848159
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