With new federal rules and mandates, you’d think that health insurers would be beating the loudest drum in the repeal-the-Affordable Care Act band.
But they’re not, and there are a couple of reasons why.
The first is pretty obvious. Millions of uninsured people will be flooding the online exchanges when they open nationwide on Oct. 1, presenting companies with a tremendous opportunity to build their roles and revenues.
But that may not be the only reason. Even insured workers may soon be allowed to pick plans over online marketplaces, upending the traditional model of employers knowing best.
In any event, “the direct-to-consumer health insurance market is growing,” says Joel Cantor, a professor of health policy at Rutgers University. “Under the Affordable Care Act, 15 to 16 million people will be in that market for health insurance in the next year or so. That is a significant increase.”
Until the ACA was passed in 2010, health insurance was pretty much a business-to-business transaction. Insurers sold plans to employers acting as proxies for their employees. Once the ACA became law, insurers started refocusing their marketing strategies on consumers.
Many insurers in Pennsylvania and New Jersey are preparing to launch marketing efforts to educate consumers. Most of New Jersey’s large insurers, including Aetna, Horizon Blue Cross and Blue Shield, and AmeriHealth, will be in the state’s federally run exchange and will be joined by at least one newcomer, Freelancers Union Co-op.
Independence Blue Cross, the region’s largest insurer, has also been gearing up. “Where we’ve put a lot of emphasis is really on getting new tools and new marketing techniques and new ways of engaging the consumer directly,” said Scott Post, IBC’s vice president of corporate and association affairs.
Independence is hiring people with retail marketing experience. The company expects that in the coming months, its customer-service representatives will be fielding different types of questions than they used to, because many people are buying insurance for the first time. The company is also placing a new emphasis on data.
“Data is beginning to play a much more important role, probably in a big way,” Post said. “The foundation to retail marketing is understanding the data that you have.”
Since ACA regulations let insurers help educate consumers, Independence will be going into communities and talking to consumers about its plans and the federal subsidies that are available. “It’s not just, ‘Now, what are my benefits,’ but, ‘What is my subsidy,’ and ‘How do you figure this out on your tax return?’ ” he said.
Staffing kiosks and stores in malls and community outreach serves another purpose – creating a brand name. “It’s all about branding,” said Joel Ario, a managing director at Manatt Health Care Solutions and a former Pennsylvania Insurance Commissioner. “The companies are branding themselves so people will know them like they know the auto insurers.”
And that may be the less obvious reason health insurers aren’t fighting the ACA. Exchanges may be the future of health insurance, and companies want to establish their brand. Ario said insurers are looking beyond the 20 million to 30 million people who will use public exchanges, and set their sights on the people receiving employer-based insurance.
“Generally at least 25 percent of employers say they are ready to move to an exchange right now,” Ario said. “So we are talking about 160 million people in exchange-based coverage.”
Ario said the larger insurance brokers are promoting their private exchanges to employers. In the near future, he sees those brokers giving employers three choices: “You can stand pat; dump everything and pay the fine; or give your employees a defined contribution that they can use to go to an exchange, where they will get a broader choice and can pick their own plan.”