While no hard spending estimates are available-private companies were prohibited from offering details on specific plans until Oct. 1-it's conceivable that $1 billion could be spent in marketing between now and May, when sign up without financial penalty ends, to promote the biggest expansion to the federal health program for elderly and disabled citizens since Medicare launched nearly half a century ago. Three health-care providers alone, United Healthcare, Aetna and Humana, are expected to unleash a collective $200 million beginning this week.
There will be "a lot of money" spent, said Joseph Antos, health-policy expert at Washington think tank The American Enterprise Institute. "There are so many sponsors, and so much competition for enrollees. There's such a short time schedule; it isn't a decision consumers like to rethink, so it won't pay off [for companies] to put as big a blitz into advertising next year."
The prescription-drug benefit is a new component of Medicare in which private companies and insurers offer insurance plans that cover both brand-name and generic prescription drugs. In addition to 10 insurers and pharmacy benefit managers selected by the Centers for Medicare & Medicaid Services to sell drug plans nationally, a host of regional insurers are also selling plans. In New York and Texas, for instance, Medicare recipients can choose from among 20 plans. In Virginia, 16 insurers are vying for enrollees.
CMS in recent months has used part of its three-year, $300 million budget on educational campaigns that include TV spots, promotions and direct mail. "We're trying to reach them where they live, work, pray and plan," said a spokesman.
United HealthCare put $75 million into its marketing campaign; Aetna pegged its overall marketing budget at $50 million; and Humana said its program, which includes going on the road to Wal-Marts with recreational vehicles, will cost $80 million.
Pacificare, one of 10 insurers and pharmacy-benefit managers selected by the CMS to sell Medicare drug plans nationally, is using familiar faces to pitch its program in TV spots: Fred and Ethel Mertz, the famously cranky, fictional couple stars of 1950s sitcom "I Love Lucy."
Cake and spinach
"It is a very complex message that if you give it to someone very straight, you'll lose them. ... Fred and Ethel are, in a way, cake along with the spinach," said Mike Sheldon, president, Interpublic Group of Cos.' Deutsch, Los Angeles, Pacificare's shop. The Mertz spots are part of a larger campaign that includes direct-response mail and print ads.
Promoting the drug plans is a massive marketing challenge-"either a marketer's nightmare or a marketer's dream," said Tom Qualley, head of marketing for Aetna Medicare, also one of the 10 national providers. The subject is complex and therefore difficult to convey quickly, and a lot of confusion about the plan already exists among the general population.
Results of market research conducted in January by Aetna, for instance, revealed that many seniors believed enrollment wasn't necessary. "They thought they could simply go to a pharmacy, put down their [Medicare] card and get their prescriptions at a reduced price or for free," said Mr. Qualley.
With its advertising and media agency Grey Direct, a unit of WPP Group's Grey Worldwide, Aetna is developing its largest direct-to-consumer advertising effort: TV, print, direct and online efforts and programs with joint-marketing partners like Walgreen's, Rite-Aid and even a grocery store chain in Texas. "It's been 12 to 14 hour days, six days a week since last winter," said Mr. Qualley. "It's pretty much a full-force effort until May 15."
Contributing: Rich Thomaselli