Reform is rapidly changing the healthcare landscape, leading insurance marketers to evolve approaches that worked in the past — all while spending less on traditional marketing tactics. With the right efforts, insurance providers can cut costs and still find new ways to connect with consumers by putting them at the center, doing more with less and being more accountable to marketing dollars.

Written by
Todd Pollack
October 2013

Without question, the healthcare landscape has rapidly changed with the implementation of the Affordable Care Act (ACA). This shift is full of challenges, but they can be addressed by focusing on consumer outreach and building a brand that consumers look at in a new way.

The ACA’s “medical loss ratio” (MLR), or the “80/20 rule,” is one of the biggest changes healthcare marketers are facing. According to this regulation, 80% of premium dollars collected must be spent on medical care and consumer health improvement activities. That leaves only 20% of the money collected from subscribers for marketing, administrative costs and profit. This was signed into law in March 2010 (as part of the Affordable Care Act), but many marketers are still trying to figure out how to effectively trim costs while still getting the word out to consumers.

Another game changer is the introduction of health insurance marketplaces, which began open enrollment at the beginning of October. As we wrote last year, these exchanges intend to provide consumers with more options and easier access to purchasing health insurance. Some companies will be attracted to the private exchange option and drop their health insurance plans outright. They’ll instead give employees vouchers to purchase insurance from exchanges.

The big question: With the 80/20 rule limiting marketing budgets, how will insurers address consumers looking to buy on the new exchanges and orient themselves toward more accountable results?

Do more with less

Marketers are often asked to do more with less. And with the last recession not far behind us, this is more true than ever. The new MLR rules will only compound the need for belt-tightening. You could say that MLR actually stands for “More with Less, Really.”

To do that, advertisers need to get creative. Some companies are focusing on content to improve consumer health instead of traditional ad campaigns. Educating consumers on how health insurance exchanges work is a great example. We're seeing companies such as Aflac, Blue Shield of California and eHealth build web resources dedicated to explaining the ACA. These resources not only earn consumer love and strengthen brand recognition, they can come from the 80% section of MLR for improving consumer well-being. To quote the ACA directly, "In calculating its MLR, an issuer may allocate any percentage of its expenses to quality improvement activities."

This new content has a hungry audience that wants to know and understand healthcare reform. With a better online experience, marketers have a chance to redefine their brand and get consumers thinking about what you offer them — beyond health insurance — in a different light.

Breaking down barriers among your marketing team is also incredibly important for added efficiency, especially with your brand and direct response units. Ideally, your teams should be aligned across all channels. With consumer experience-focused marketing, branding efforts can strongly influence direct response activity to get a bigger bang in the marketplace.

Put consumers at the center

Health insurance has always been a B2B business, and the main goal was to sign businesses up for services. That’s still a good chunk of the market, but with the health exchanges, insurers need to sell primarily to consumers now. This means a stronger shift to B2C marketing and putting the consumer experience first.

The truth is, researching health insurance isn't an easy process. The new insurance exchanges will do some of the heavy lifting to make features and pricing more transparent, but it’s not enough. Health insurance sites still contain a deluge of information and you often have to download a PDF just to view information about specific plans. Brands would be smart to improve their approach to the customer — and fast. When people use the exchanges, they may want to look at your brand’s site for additional info. If they can’t find yours as easily as another brand, you could lose potential customers.

The health insurance industry needs to learn from other industries to make things accessible and stand out in this new “retail” environment. The travel industry has done this in recent years; researching flights and hotels is now a relative breeze. Whether it’s Kayak or, these sites have made it so easy that people rarely use travel agents anymore for the vast majority of travel bookings. Just like travel agents have mostly gone away, expect health insurance agents to play a smaller role as sites improve the quality of their experiences.

Many travel-related companies have defined what separates their brand from others. Airlines such as Virgin America, JetBlue and Southwest have all solidified themselves in consumer minds for offering things like unique flight experiences, sterling customer service or no fees on checked baggage.

Like these travel companies have done, put yourself in the shoes of your customers to address pain points related to managing patient care. Don’t settle for just signing up new customers — do what you can to make them lifetime members. Insurance companies must find innovative new ways to manage customers’ health over the long haul, or they won’t stand out in this new environment. Consumers are now the health insurance decision makers, and brands need to find ways to overcome the race to the bottom, where only price matters.

Start being accountable

Tighter budgets also mean every dollar spent needs to be accountable, and understanding the return on marketing dollars is more important than ever. You need to more tightly align your message across TV, radio, online, and other media so your spending goes further in promoting the brand.

Spending on traditional outlets like television have a high reach, but it is hard to see direct results. In a digital, “big data” world, anything can be quantified, and it’s possible to tie campaigns more carefully from branding efforts down to the acquisition. Traditional methods aren’t going away quite yet, so it is vital to orchestrate all your efforts and know the effect they have on one another. You should aspire to measure the success of campaigns by the health outcomes of members and how often people utilize services.

This approach can help you connect better with policyholders’ personal needs as well. Knowing if a consumer is interested in healthy eating and rehabbing a knee injury or is interested in yoga and blood pressure management would greatly shift the conversation you have with him or her. This single view of a consumer will lead to more relevant marketing, and in time, a more loyal and engaged customer.

Tighter budgets mean every dollar spent needs to be accountable, and understanding the return on marketing dollars is more important than ever.

With the shift from businesses to consumers, insurance marketers’ measurements for success will need to change as well. Typical campaigns that focus on reach and frequency will now need to show how they are helping to drive additional metrics like engagement, consideration and conversion — metrics that will be important moving forward and soon will become new habits for health insurance marketers.

What health insurance marketers need to do now

Yes, there's a lot to do. Where to start is the big unknown for many health insurers. But there are two main takeaways that can help marketers prioritize:

Accountable Branding

Hold your branding more accountable with smarter resource allocation. Tie your TV, radio and direct mail ads more closely to your online efforts to get the most bang out of your buck. Also quantify your campaign results in a way that makes sense to your new challenges. The success of new campaigns shouldn'™t be measured simply on last clicks or conversions, but they should also be evaluated on metrics such as video views, new site visits, impressions, quote completes, cookie list volume and policy value.

Consumer Centricity

Put consumers at the center of your business model. Create a strategy that consumers can connect with not only emotionally but also in a way that enables a smarter acquisition strategy. Provide curious consumers with helpful content that is simple to access, and build your site to learn more about them in the process. Helping consumers with the right message at the right moment will lead to a better customer experience, and it ensures a higher chance of cultivating a lifelong relationship. This way, health insurers will truly partner with the consumer and effectively take part in managing their health.