Insurers are not being as strategic as they could be to reach the millions of people who are choosing a health insurance policy for 2017.
Even as former President Bill Clinton derides Obamacare as "the craziest thing in the world," healthcare plans are gearing up to spend huge sums on marketing and advertising for the open enrollment period beginning in November.
Whether they are spending all that money wisely is uncertain.
Clinton was campaigning for his wife in Flint, Michigan on Monday when he criticized the Affordable Care Act as unworkable for many consumers.
"You've got this crazy system where all of a sudden 25 million more people have healthcare and then the people are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half," he said. "It's the craziest thing in the world."
Clinton is not the only one who thinks so, with complaints about high premiums and deductibles at the top of any consumer survey regarding the Affordable Care Act.
Healthcare plans have to address that complaint during the two months they have to reach millions of people choosing a policy for 2017, but many are not making the most of their marketing and advertising budgets, according to Steve Yi, CEO of MediaAlpha, which helps insurers attract the right consumers.
"The plans are anticipating a high volume of searches for insurance quotes in the upcoming enrollment period, approaching the volume they saw in the early open enrollment periods," Yi says.
"That is an opportunity, but carriers can be a lot more careful about targeting during this period than most have been in the past."
Targeting Consumers
Insurers should focus on finding the right consumer, Yi says, and that requires deep analytics and targeting based on information the consumers provide when searching for coverage, such as family background, income levels, ZIP code, number of family members, and age.
That kind of data sometimes is collected when a consumer uses a health insurance quote search online, making that avenue more efficient than banner ads, he says.
Many insurers are new to consumer-level marketing and do not take advantage of the segmentation that is available, Yi says. That can lead to more of a shotgun approach that tries to reach a large volume of consumers rather than focusing on the smaller segment that the insurer really wants to recruit.
Profitability concerns have forced many insurers to cut back on marketing and advertising even when they desperately need new customers, Yi says. In addition, consumers will find fewer choices because of the number of insurers who have pulled out of some markets.
"There is going to be a bit of mismatch between the consumer demand we see in this open enrollment period and the number of carriers who are going to be marketing actively during this period," Yi says.
"We do anticipate a high number of searches and people looking for different alternatives, but we're seeing the carriers' budgets and marketing pulled back."
Online Inexperience
Insurers are not being as strategic about cutbacks as they should be, Yi says. Their inexperience with online marketing leaves many not knowing how to selectively pull back marketing dollars in some areas while investing more heavily in other areas, he says.
"In addition to knowing where you should go to reach those consumers, it also is about tailoring your web site's user experience to the specifics you know about that segment of the population. Whether someone is subsidy-eligible, their ZIP code, who they're covered with now, all of those things and more can determine what their end experience should be when a search directs them to your web site."
"There is a lot of information that the insurers can use to more effectively target their budgets, even if they are cutting back," Yi says.
Gregory A. Freeman is a contributing writer for HealthLeaders.