A June 2013 article written by Anna Gorman that appeared in the LA Times highlights the challenge facing managed care organizations (MCOs) across the United States as the Affordable Care Act (“Obamacare”) enrollment opens in October. Specifically, the reluctance of young adults to enroll in a health care plan and how it makes health care marketing difficult.
More than 2 million Californians ages 19 to 34 are uninsured, according to the UCLA Center for Health Policy Research.
The Obama administration has characterized the estimated 33 million uninsured Americans as victims of a system that fails to provide affordable access to health care. While true for some, the reality is that even when faced with an escalating fine schedule through 2015, some Americans will simply forego insurance. The reason? The hurdle may not be the co-pay cost; rather, a lack of understanding of why insurance is valuable.
“Getting young adults on board will require changing cultural norms. For kids in their 20s … following convention isn’t their first instinct,” said Larry Levitt, senior vice president at the Kaiser Family Foundation. He goes on to say, “Convincing them to spend money on insurance will be a ‘marketing challenge.’”
In contrast, uninsured parents with children (most of whom are likely already familiar with Medicaid children’s insurance programs such as CHIP), the benefits of insurance are a little better understood. They’ve likely made trips to the ER for their child’s flu symptoms, or tried to nurse their own illness with over-the-counter remedies. However, for students or single young adults who have never shopped for insurance, the value proposition of owning insurance is simply not clear.
This presents both an opportunity and a challenge for MCOs/HMOs who intend to participate in the Health Insurance Marketplace as they think about their go-to-market strategy.
Before MCOs can think about sales-oriented messaging of price, plan features, and enrollment stations, they need to first think about how they are going to illustrate the value of insurance in the first place. Even a co-pay as low as $100/month could be viewed by young adults as cutting into their lifestyle funds and rebuked.
MCOs must also realize that messaging focused on the benefits of insurance during periods of illness are likely to fail, as the younger population doesn’t perceive that they become ill very often. So the message strategy will need to focus on how health insurance can provide peace of mind for injuries, which the “X-Games” generation is prone to incur. The cost of a mountain bike crash, skateboard accident, or weekend injury can quickly cost thousands (or tens of thousands) of dollars depending on type. Young adults, especially those who meet the Federal Poverty Level threshold requirements, are not equipped to absorb this type of expense. It is this realization that can create the tipping point for creating interest in health insurance plans.
The Young Invincibles, a policy and advocacy organization, has also started a campaign and a mobile app to raise awareness about health coverage. The organization’s California director, Tamika Butler, said the group was focusing on both enrollment and education.
So once MCOs refine their message strategy, the next question might be, “What mediums are most effective for reaching the target audience?” The tendency might be to immediately think broadcast advertising, but that has a couple of drawbacks – namely cost and audience reach. With regards to cost, if an MCO is relatively smaller than its local competitors, it won’t be able to outspend them for frequency. What’s more, the younger adult population is spending less time watching mainstream TV and listening to FM radio. Instead, the Internet and cable programming (TV and radio) are the preferred mediums of choice.
With regards to the Internet, the most effective strategy is to engage (social media, information portals, forums/groups, earned media), rather than “talk at” the target audience.
Organizations such as Enroll America have been clear in their recommendation to MCOs to pursue an integrated marketing strategy that combines grassroots, digital, advertising, earned media, and additional elements to win the hearts and minds of the uninsured.
If you are a MCO that is looking for assistance in developing and executing a strategy to reach young adults, we can help. We are currently working with some of the largest MCOs in San Antonio and Austin to target not only the young adult population, but also uninsured parents of CHIP and STAR kids to protect the MCO’s core business. Additionally, those middle-aged adults who are not yet eligible for Medicare represent a third group who will be seeking answers to questions regarding the Affordable Care Act. This is a great time for MCOs destined to participate in the Health Insurance Marketplace to get this right. Read our other blog post about healthcare marketing to young adults to learn more.