Explosion of Obamacare-Related Ads Likely As Glitches Fade Away

Administration's $12M Spend Will Be Drop in Bucket as Insurers, Opponents Boost Efforts

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Functional Healthcare.gov site urges consumers to sign up.
Functional Healthcare.gov site urges consumers to sign up.

With improvements of the problem-riddled Healthcare.gov web site and a March 31 deadline for people to enroll in coverage this year, the Obama administration is ready for a blitz of advertising that is expected to cost at least $12 million and could go much higher.

But not high enough to include a Super Bowl spot, according to an official with the Department of Health and Human Services.

HHS, however, will be making a play in local markets during the winter Olympics.

Between figure skating competitions and the luge runs, young viewers will be urged to sign up for coverage under the Affordable Care Act.

The HHS official said the ads will run in markets with the highest rates of uninsured.

"Because normal prime time and other sports programming tends to take a ratings hit during the Olympics, [HHS] has decided to shift some paid media budget to the NBC Olympic inventory in our local target markets to capitalize on this increased viewership," the official said.

That ad buy by HHS is only a small part of a campaign to sell the public on the Affordable Care Act that has been stalled, first by the government shutdown last fall, then by the horrific failures of health-exchange web sites developed to sell policies to the uninsured.

The administration's $12 million will likely be a drop in the bucket of ACA-related advertising, from both insurers looking to win over consumers and opponents pushing for a repeal of the plan.

Using projections from PricewaterhouseCoopers, Scott Roskowski, senior VP-marketing for TVB, a trade association for the broadcast TV industry, predicts health insurers will spend $500 million -- or more -- on ads this year. He also says his estimates are conservative.

Why? Mr. Roskowski said the industry stands to gain $100 billion in new revenue because of the Affordable Care Act's mandate that nearly all Americans have health care coverage.

"This is really the growth sector in local broadcast television," Mr. Roskowski said. "It's going to be a heck of a year."

Wellpoint, which works with Rokkan and New Control, said it expects to spend up to $100 million by the end of this year on TV, social media and print ads targeting millennials because they are young and healthy and will offset the cost of sicker, older policyholders.

Insurers have had to shift strategies in their new ad campaigns. Many have never had to market directly to individuals but concentrated their business on group policies they pitched to businesses and unions.

Right now, insurers are branding themselves, Mr. Roskowski said, but he said he expects "more hardline messages as the ACA policies become more accepted."

Cigna, for example, continues to push its "Go You" campaign, created by Hill Holliday, on TV and online. It also created a site meant to explain the ins and outs of health-care reform.

Meanwhile, the Republican National Committee, business organizations like the U.S. Chamber of Commerce, dozens of conservative groups like the ones backed by the Koch Brothers and other opponents of the ACA will spend as much as the insurers trying to stop people from enrolling in coverage and attacking Democrats in tight races, Mr. Roskowski said.

He points to recent RNC radio ads as just a modest indication of how many anti-ACA ads will air in this election year. The ads began running this week in 12 states, targeting vulnerable Senate and House members.

"It's very early for ads to be breaking, so it's an indication for things to come," he said.

Other players will be state-run exchanges -- Covered California has already spent $7 million on advertising -- and hospital, clinics and medical centers who will also try to promote themselves.

Advertising may have already played a big role in the rollout of the Affordable Care Act's health exchanges.

A Kantar Media CMAG study of health-insurance company ad spending during the last six months of 2013 showed it climbed to more than $40 million during the week of Dec. 1, when enrollments began to peak, then dropped off precipitously for the rest of the year, perhaps because the sign-up period for coverage beginning on Jan. 1 was expiring.

Kantar also determined anti-Obamacare spending topped $11 million last year, concentrated in the "red" states of the South and West.

According to Kantar, the most money spent on broadcast ads opposing the Affordable Care Act was spent in the Charlotte and Raleigh, N.C., media markets, ($967,429 and $707,997respectively) followed by Louisville, Ky. ($615,284) and Washington D.C. ($604,988.)

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