When the Affordable Care Act’s health insurance exchanges open for business in the fall, it will be a new game. Customers will be able to comparison shop in the new online marketplaces, and health insurers will have to sell themselves to the general public in a way they haven’t before.
The law’s requirement that almost everyone buy insurance sounds like a marketer’s dream – captive shoppers directed by the government to buy your product. But when the product is health insurance, there are undoubtedly some pitfalls: Customers may not love your brand. In fact, they may despise you. You doubled, tripled, quadrupled their premiums. You denied them coverage because of a pre-existing condition just when they needed you most.
James Percelay, the co-founder of the viral marketing firm Thinkmodo in New York City, sat down with Kaiser Health News to talk through the advertising challenges insurers will face in the coming months.
“I think it may be too little too late for health insurance companies to now come out, like, ‘Hey! We were just kidding the last 50 years! We’re really not the people that you think we are!’” Percelay says.
Not only do people dislike insurance companies, they’re hard to tell apart. Customers will go to a website and see a list of indistinguishable names: Humana, Oxford, Blue Cross, HealthNet. The products and prices won’t look that different. It’s the perfect moment, says Percelay, for a little humor.
“You cannot really differentiate one insurance company from another, but you can differentiate who has the wackiest mascot or scenarios that are fun to watch,” he says.
Car insurers have blazed this path already: Geico has its talking lizard. Progressive Car Insurance has that perky woman named Flo. Percelay says he expects health insurers to follow suit.
Another challenge health insurers face is convincing young healthy people to sign up. The new markets need these so-called “young invincibles” to be financially viable, but young people are the least willing to pay for coverage. Percelay says insurers need to craft their message to reach that demographic.
“There could be product placement in a Jackass movie so subliminally when Steve-O is bungee jumping with a rubber band off the roof of a building, perhaps that rubber band has an Oxford logo on it,” he says.
Health insurance companies could start claiming the same advertising spots reserved for Red Bull and Corona. Poolside parties could be sponsored by the Humana Cabana.
And companies will have to go to where young adults spend their time: on their phones and inside video games.
“You could even see video games integrate health insurance marketing,” says Percelay. “Maybe there’s Angina Birds” as a game instead of Angry Birds.
Or how about a health plan underwriting one of MTV’s reality television shows. The next Jersey Shore brought to you by Blue Cross Blue Shield. Percelay has the tag line ready: “‘Don’t Binge Without Blue!’ You know, tie in to this lifestyle that kids allegedly want to have.”
As fun as all this sounds, it costs a lot of money for an insurance company to sign you up for the first time, so they want you to stick with them. Health plans will have to give customers a reason to pick a brand and stay loyal.
“Customer retention for insurance companies is going to be based on some sort of reward, some reason to stay with them,” he says.
Percelay could easily see iTunes credits or a Starbucks card for paying your bill on time or staying healthy.
Indeed, the health insurance company Humana already allows its customers to earn “Vitality Bucks” that can be redeemed at the “Humana Vitality Mall.” Keep your blood pressure in check, earn a digital camera!
One thing is for sure: We’re all about to be blanketed with health insurance advertisements. And for the first time, the customer will become king.
This KHN story was produced in collaboration with NPR’s Planet Money.