A chart showing that search activity for "health insurance" holds pretty steady, but search activity for "Covered California" is much higher during the individual major medical open enrollment. But interest last year was the lowest since at least November 2014. Increasing marketing spending at Covered California has translated into a modest increase in Google search activity early on. (Credit: Google Trends)

Managers of HealthCare.gov and Covered California are back to producing data to answer two big marketing questions: How much do traditional, high-cost outreach efforts really help sales, and how well do cheaper digital strategies work?

The Affordable Care Act (ACA) public exchange programs, or web-based supermarkets for health insurance, have now started helping people buy individual and family coverage from commercial health insurers throughout the United States.

(Related: Agents Beat Nonprofit Navigators: HealthCare.gov Boss)

The individual major medical open enrollment period for 2020 coverage — or time when people can buy coverage without showing they have what the government classifies as a great reason to be shopping for coverage — is set to run through Dec. 15 in most of the country.

In California, the biggest U.S. state, the open enrollment period for 2020 started Oct. 15 and is set to run through Jan. 15.

The History

Back in 2009, the ACA drafters wanted states to set up and run their own state-based public exchange programs, to help residents shop for health coverage on an apples-to-apples basis, and to use federal premium tax credit subsidies to pay for the coverage.

At that point, Republicans were on the sidelines. Democrats who wanted a government-run health finance system were going up against Democrats who wanted to keep commercial carriers in the system. The Democrats who favored keeping commercial carriers in the system saw the exchange program as a way to make the health finance system cheaper and better, by forcing carriers to compete harder for consumers’ business.

The U.S. Department of Health and Human Services (HHS) set up HealthCare.gov to provide exchange account signup and administration services for residents of states that are unwilling or unable to handle all ACA public exchange activities themselves. HHS runs HealthCare.gov through the Center for Consumer Information and Insurance Oversight (CCIIO), an arm of the Centers for Medicare and Medicaid Services (CMS).

HealthCare.gov officials reported this summer that agents and brokers helped with 44% of 2019 HealthCare.gov coverage enrollees sign up for coverage.

Covered California officials reported in January that agents helped 48% of Covered California’s 2019 enrollees sign up for coverage. About 33% of the enrollees signed up without live-human help, and 12.5% came in through a service center representative.

The Numbers

The ACA exchange system helped about 11.4 million people sign up for health coverage during the open enrollment period for 2019 coverage, according to CMS. The number of enrollees was down 3.3% from the total for 2018 coverage.

The number of enrollees who were new to the system fell 27%, to 2.7 million.

The number of returning enrollees increased about 7%, to 8.7 million.

HealthCare.gov says it had 44,644 individual market agents and brokers registered as of Oct. 31, up 9% from the year-earlier total. A slidedeck showed that about 7,000 of its agents help with an average of more than one enrollment per business day.

At Covered California, signups fell 0.5%, to 1.5 million, according to a February board meeting executive director’s report.

New signups fell 24%, to 295,980.

Renewals increased 7.5%, to 1.2 million.

Covered California says it has 10,417 agents.

Aflac Inc., for comparison, says it has about 7,100 average weekly producers.

Marketing

HealthCare.gov officials have said they expect to spend about $10 million on marketing this year. That’s about the same as for the open enrollment period for 2019, but down from about $100 million, per year under former President Barack Obama.

Covered California is increasing its marketing budget to $121 million, up from $107 million.

Covered California officials have argued that more spending on outreach brings in more younger, healthier people who may never thought much about needing health insurance, and that relying on consumer inertia and word-of-mouth recommendations may leave an exchange with an older, sicker, costlier pool of insureds.

Covered California says the zeroing out of the ACA penalty on individuals who lack what the government classifies as adequate health coverage is another headwind.

In Massachusetts, which has imposed a state tax penalty, the number of new exchange plan enrollees increased 31%, according to a Covered California analysis.

At many other exchange programs, including Covered California, the number of new enrollees fell, according to the Covered California analysis.

Strategies

HealthCare.gov officials have said they will be relying mainly on inexpensive email- and social-media based campaigns.

Today, for example, HealthCare.gov sent past users an email welcoming them to 2020 open enrollment and showing their current 2020 coverage status.

HealthCare.gov officials have argued that many people know how the exchange plan system works now, and that the level of marketing support should be comparable to the level of marketing support for the Medicare annual enrollment period.

Covered California, in contrast, has developed a communication strategy that includes television ads and events as well as digital efforts.

The exchange has developed separate campaigns for the Hispanic, Asian, African American and LGTBQ communities, with a number of the TV ads featuring slogans starting with the phrase “You shouldn’t have to.”

In one ad, for example, a narrator says, as a woman lies in a hospital bed, “You shouldn’t have to worry about the cost… but without insurance, you don’t have a choice.”

Managers of other state-based exchange programs, such as the exchange in Colorado, are developing similar types of outreach campaigns.

— Read Agents and Brokers Generated 44% of 2019 HealthCare.gov Signupson ThinkAdvisor.

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