Insurers step up pitch for Obamacare as government slashes its effort

NEW YORK (Reuters) – President Donald Trump’s 90 percent cut to Obamacare advertising has U.S. health insurers in many states digging deeper into their pockets to get the word out about 2018 enrollment, which opened last week.

Independence Blue Cross, a health insurer in Pennsylvania, has commissioned a tractor trailer truck to bring insurance consultants out to shopping centers and other neighborhood spots around Philadelphia.

Centene Corp (CNC.N), best known for its Medicaid health insurance, is expanding TV and print advertising for Obamacare as it ventures into three new states: Kansas, Missouri and Nevada. Tech-savvy newcomer Oscar Health has four different TV commercials running in six states including Texas and Ohio that espouse “easy health insurance” with video shots of patients text-messaging with Oscar.

Trump cut $90 million in advertising and outreach spending for the 2018 enrollment period, which opened on Nov. 1, part of his promise to let Democratic President Barack Obama’s signature healthcare law “implode” until Congress can repeal it.

Republicans say the Affordable Care Act, the law that created Obamacare, drives up costs for consumers, while Democrats warn that millions of Americans will be left without healthcare if it is dismantled.

The advertising serves two roles: It helps draw in the young, healthy customers who keep overall member costs down and it addresses confusion among many people over whether the subsidies that help make coverage affordable to many and Obamacare itself still exist in the wake of Trump’s actions.

The government’s advertising budget is now just $10 million for the 39 states that rely on the federal Healthcare.gov website to enroll consumers. The 11 states that run their own exchanges, like California and New York, set their own advertising budgets.

“Our member plans are generally ramping up their efforts to kind of plug that hole,” said Kelley Turek, an executive policy director at industry lobbyist America’s Health Insurance Plans. “A decrease of $90 million is a big hole to plug.”

News headlines about changes in the government’s support of Obamacare and Trump’s tweets have raised fears that all program subsidies are ending. The government has also cut the enrollment period in half, to six weeks. (tmsnrt.rs/2k1HAlV)

Adding to the confusion, insurers like Anthem Inc (ANTM.N) have sharply raised monthly premiums on the most popular Obamacare plans to account for reduced government funding, or pulled out of dozens of U.S. counties. As a result, many Obamacare customers may need to change health plans for 2018, either to work with a different insurer or in response to price increases.

“I still run into people who are wondering, am I still going to have a plan next year?” Independence Blue Cross Chief Executive Officer Daniel Hilferty said in an interview.

Hilferty said the company is increasing its advertising this year in part because of that confusion.

IMBALANCED MARKET

In September, the Congressional Budget Office said it expected 2018 enrollment to reach 11 million people versus about 10 million this year. It cut its previous projection by 4 million as Trump threatened the law and later cut the estimated $10 billion in government subsidies to insurers to cover customer out-of-pocket costs in 2018.

To make up for the reduced subsidies, which apply to the most common “silver” plans – the middle tier of the plans offered – insurers raised premiums by about 20 percent on those plans.

Others say total sign-ups will drop. Get America Covered, an outreach group founded by former Obama administration officials, predicts 1.1 million fewer people will sign up during the enrollment period. Lori Lodes, a co-founder of the group, said the effort by insurers focused on local markets could not match the impact of a national campaign.

Various insurers say they are trying.

Blue Cross Blue Shield of North Dakota, the sole Obamacare insurer in most of North Dakota, increased online advertising for 2018, while traditional TV and radio advertising remained about flat, spokeswoman Andrea Dinneen said.

Florida Blue, which has about 1 million members in Obamacare plans throughout Florida, is increasing its grass roots efforts this year. It has hired 700 temporary employees to help with enrollment and is planning to take part in more than 1,000 enrollment events, such as county fairs or educational sessions, spokesman Paul Kluding said.

On the other hand, Blue Cross Blue Shield of Michigan said it would spend less on wooing customers because of the financial pressures from the lowered subsidies, which went into effect this month. Instead it will focus on helping existing customers select plans that may keep premium costs down, rather than automatically re-enrolling in the silver plans.

“We decided to try to be as lean as possible,” said Rick Notter, director of the individual business.

Reporting by Caroline Humer; Editing by Michele Gershberg and Leslie Adler

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