Lessons from Covered California: Marketing matters

At 3 pm ET on Thursday, Oct. 12, Victoria Colliver of Politico will lead a conversation with Peter Lee, executive director of Covered California, about lessons learned during the first years of enrollment in the ACA exchange. They’ll also discuss how the exchange is adapting to the changed political climate for health care in the Trump administration.

HHS recently announced that it would slash marketing, advertising, and signup assistance for the 2018 signup season, which begins Nov. 1. That the administration was reducing outreach should not have been a surprise, given that as soon as President Trump took office, his HHS leadership team pulled back on advertising and marketing during the critical final days of the 2017 signup season.

Spending on marketing and advertising for the 2018 plan year will drop from $100 million spent on 2017 sign-ups to $10 million. Funding for consumer helpers called “navigators” will be cut 40 percent – from $62.5 million for 2017 to $36.8 million for the coming season. The Centers for Medicare & Medicaid Services, the agency responsible for overseeing the ACA, says navigators were falling short of their sign-up targets and wasting money and asserted that “the new funding formula will ensure accountability within the Navigator program.” (For more on the administration policy, see in this Vox story.)

The depth of the 2018 cuts may have been a shocker – and signaled that even if Congress got stuck on its ACA repeal-and-replace goal, the administration would use its regulatory and budgetary powers to shrink or weaken the law.

Peter Lee, executive director of Covered California

The state exchanges – the ones not relying on Healthcare.gov to handle sign-ups – do their own outreach. The California exchange, known as Covered California, put out a report and held a panel discussion in Washington D.C. to discuss the importance of marketing and best practices. The California exchange is among the most successful both in terms of enrollment, and the composition of its risk pool. Director Peter Lee – who will participate in an AHCJ webinar on Oct. 12 – says one reason for the agency’s success is that it has done a good job of marketing itself to an extremely diverse population, and providing appropriate enrollment assistance from navigators and other outreach workers, both in person and through call centers.

Here’s the full report and an issue brief that summarizes it. Here’s a toolkit that the California exchange created for other states, which included strategies and some of the ads and scripts that have been successful in providing information about the exchange, subsidies and preventive care. It may be worth looking at what your state is and is not doing – why or why not – and look at whether any advocacy groups pick up on these practices.

Lee’s key points: Buying insurance is complicated. Many people, particularly those young and healthy ones we’ve all written about, think they don’t need it. Without marketing and outreach, a state’s market won’t get a good risk pool that helps keep down premiums. A state won’t get its younger and healthier people to sign up unless it works at it – you can’t have a sound insurance market without younger and healthier people. If only sick people sign up, the result is rising premiums and the dreaded “death spiral.” In other words, investment in outreach pays for itself with a more stable market and lower premiums, Lee said.

The report also shows that the navigator and outreach program has been quite efficient, at least in California. The cost per enrollee has come down to a level that Lee says is not much different from a broker’s fee. It also pays for itself by keeping the marketing functioning with that risk pool. The investment pays for itself concretely in keeping premiums down, not to mention getting people covered.

The alternative: Lee predicts that the cuts in federal outreach will mean about one million fewer people will be covered nationwide in the exchanges. Since they are likely to be older and sicker, premiums will rise again.

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