Health Insurance Advertising to Explode

Private health insurers are racing to capture market share under the Affordable Care Act.


Several sources have reported that health insurers will spend hundreds of millions of dollars to lure policyholders to purchase their health plans on the exchanges set up under the Affordable Care Act.

Timothy W. Martin, Health Insurers Crank Up Ad Spending, Wall Street Journal (December 15, 2013):

WellPoint Inc.—which has held off for weeks on a planned campaign as problems with the website made it impossible for many consumers to sign up— said it expects to spend up to $100 million by the end of this year on TV, social media and print ads targeting mostly young and healthy people—the consumers it covets most because their premiums will help offset the medical costs of older, sicker policyholders.

 Bruce Jaspen, ObamaCare Ad Spending Blitz Begins as Website Improves, Forbes (December 15, 2013) (describing how the State of Illinois is spending $30 million to encourage enrollment, and stating that "Private insurers are spending huge sums as well").

Ezra Klein and Evan Soltas, Wonkbook: Insurers Will Spend More than $500 Million to Get People to Sign Up for ObamaCare, Washington Post (December 16, 2013)

Insurers look at these next few years as a gold rush. Tens of millions of people will be buying private insurance of the exchanges. It's a swarm of customers like nothing they've ever seen. And they plan to capture them — even if they need to spend hundreds of millions of dollars to do so.

Dan Gorenstein, The Selling of Health Insurance, Marketplace (December 16, 2013)

For years, insurance companies marketed to human resources departments and insurance brokers.  But now, under the Affordable Care Act, millions of consumers will be comparing one plan to another, looking at price and which doctors and hospitals are included in the coverage.

In the short run these advertising campaigns will determine which health insurers will thrive and which will wither under the new regime of open competition. Advertising will drive consumers to the portal of the exchanges, but price will determine which health plan they will choose. Superior information and a reduction of transaction costs will improve the performance of this marketplace.

In the long run this portends a sea change both for the health care industry and for our health generally. For many decades there has pent up an enormous demand for health care in the United States. Until now adequate health care was beyond the reach of the poor and the lower middle class. A large proportion of our population simply couldn't afford quality health insurance or quality health care. Study after study confirmed that lower-income Americans didn't visit their doctors, didn't have regular checkups, didn't receive preventive care, and didn't monitor and treat chronic conditions such as asthma, diabetes, and hypertension.

With the advent of the Affordable Care Act that is all about to change, and Americans will live longer, healthier lives as a result.

Wilson Huhn is the author of "ObamaCare: Is It Necessary, What Will It Accomplish, Is It Constitutional"