Dozens of senior citizens gathered last week at a handsome, two-story building with a glassy facade that resembles an upscale retail store. Inside, they listened to a presentation by their insurer, Blue Cross and Blue Shield of Florida, about Medicare options and benefits. The audience also got a peek at the future of medical insurance marketing.
This time of year is a hectic, marketing-intensive period for Florida Blue and other insurers that sell Medicare policies. During the federal program’s annual election period, this year from Oct. 15 to Dec. 7, seniors can switch to a new underwriter of Medicare policies for their 2013 coverage. So, insurers are anxiously courting the Medicare population to keep current policyholders and add new ones.
"We’ve had approximately 50 attendees today," Martha Garcia, director of the Florida Blue Center in Miami, said last Tuesday. Though the center draws visitors mainly from within 15 miles of its location near the Falls Shopping Center, "we actually see folks from all over Miami-Dade County."
That kind of consumer marketing may become much more common in the under-65 market as healthcare reform unfolds, especially the individual mandate to obtain medical insurance or pay a penalty, starting in 2014. So next year, visitor traffic at the Florida Blue Centers in Miami, Fort Lauderdale and other locations around the state may increase substantially to include not only Medicare beneficiaries but also younger people shopping for individual health insurance.
"As we get closer to the end of the annual election period for Medicare, lots and lots of people come into the centers for help figuring out what to do with their Medicare," said Craig Thomas, senior vice president, government and consumer markets, of Blue Cross and Blue Shield of Florida. "And, of course, as we move closer to reform and potentially lots more people buying policies, we’d expect even more traffic than we’re getting now."
Election-year politics have clouded the outlook for healthcare reform. Republican presidential candidate Mitt Romney has said he would push for partial repeal of the Affordable Care Act, popularly known as "Obamacare," following a U.S. Supreme Court ruling earlier this year that the landmark law is constitutional. But Romney’s healthcare plan would look almost the same as the one created by the Affordable Care Act except that states would implement it, not the federal government, said Steven G. Ullman, professor and director of programs in healthcare sector management and policy at the University of Miami.
"The Obama plan is similar to the Romney plan," Ullman said, speaking last month in a public presentation on healthcare reform at the UM campus. "They are very much in agreement on what healthcare should look like. It’s just implementation at the state level versus the federal level."
Healthcare reform is likely to add to pre-existing momentum in the growing Florida market for individual medical insurance, said Michael Garner, president and chief executive officer of the Florida Association of Health Plans. "Irrespective of the election, there is definitely a need for coverage, and the industry has supported the idea of trying to make sure there’s affordable products out there, especially in the individual market," Garner said. "If for some reason the Affordable Care Act is not implemented, you still have individuals who are in the market trying to find an affordable product for their coverage."
One of those individuals is Rebecca Martin, a self-employed stylist in Miami Beach who helps advertising agencies and photography studios create marketable images of food and other products. Martin said she recently switched to a new insurer for her individual medical coverage because her previous insurer was providing poor service and preparing to increase her premium. "They were almost doubling in price, and they covered nothing," she said.
So, as she has done before, Martin searched online for something cheaper and found an attractive individual policy with Blue Cross and Blue Shield of Florida. But when she applied for the coverage, "they turned me down," Martin said. "They didn’t like that I had been to the dermatologist and had a little skin thing removed. They didn’t like that I had sinus problems. I mean, don’t most people have something? ... If you’re not perfect, they won’t insure you."
Martin ultimately bought an individual medical insurance policy from Aetna with a monthly premium of about $250 and annual deductible of $5,000, the same deductible she had with her previous insurer. "I kept it at $5,000 because I can’t afford to get a lower deductible," she said, adding that she will drop Aetna and shop for another insurer if Aetna’s premium suddenly soars. In her previous experience buying individual medical coverage, "the first year will be inexpensive, and the second year, they tend to get you," she said. "So if it goes up too much, I’ll just switch again."
Many South Floridians who now lack medical insurance also are expected to become regular shoppers for coverage, like Martin, or pay a penalty for remaining uninsured. Under the Affordable Care Act, adults without a minimum amount of medical insurance will pay an annual penalty of $95 in 2014, which will jump to $350 in 2015 and $750 in 2016. The penalty for uninsured kids 17 and younger will be half of the amount for adults. Tax credits and other subsidies will help eligible Americans pay for their medical coverage. These features of the federal government’s landmark Patient Protection and Affordable Care Act, which President Obama signed into law in 2010, are expected to encourage millions of uninsured Americans to buy medical coverage before the end of next year.
Several major health insurers have responded to the likely enlargement of the individual market by complementing their dominant, business-to-business marketing style with a more retail approach through storefront locations and other means. In addition to Blue Cross and Blue Shield of Florida, some other medical insurers also have retail locations to guide policyholders and other visitors on a walk-in basis.
"Some of them are doing kiosks in malls, and those are geared more to the individuals," said Diana Brooks, a partner at advertising agency VSBrooks in Coral Gables, which specializes in serving healthcare clients. "What I see, though, is that right now, they’re having to advertise a lot more aggressively and go out there and find the people. The people aren’t necessarily walking in so much. And that’s just a function of the economy."
Humana operates one of its Guidance Centers in Tamarac, a 3,500-square-foot space where the insurance company’s policyholders and the general public can get information about individual medical insurance and other types of coverage. The center also has served as the setting for such events as a care-package collection for U.S. soldiers and a surprise birthday party for a member of Humana’s Medicare Advantage plan who turned 101. Regular activities at the Humana facility include fitness programs and healthy cooking demonstrations. Humana’s Guidance Center in Tamarac is the only one in South Florida. The insurer also has Guidance Centers in Orlando and Zephyrhills.
But Humana’s retail reach extends far beyond the Guidance Centers that it has opened in Florida and other states in recent years. For example, starting on Monday, more than a million people enrolled in the insurer’s HumanaVitality wellness program will be eligible for 5 percent savings at Walmart stores on purchases of fresh fruits, vegetables and other grocery products that meet the nutritional standard for the retailer’s "Great For You" label.
The insurer has gone mobile, too. Owners of all Apple and Android smart phones and tablets can download the insurer’s mobile application free of charge. Users of the MyHumana Mobile App can identify doctors they need to visit, fax their identification cards to verify benefits, and find the lowest-cost medication. Downloads of the award-winning mobile app have tripled in the last 12 months.
"The health-plan landscape is changing, and we need to adapt," Javier Mendoza, vice president of strategic marketing at Miami-based AvMed Health Plans, said in an email exchange. "The expected growth in the individual market ... will lead to a shift in more direct-to-consumer marketing, so messaging will change to reach individuals, not just business decision-makers who are choosing what plans to offer their employees."
Like most insurance underwriters, Aetna has more experience marketing employer-sponsored group health plans than individual medical coverage. The 159-year-old insurance company introduced individual medical policies in Florida about six years ago to serve people who have jobs but no coverage.
"Florida had a lot of people who worked and did not have health insurance through their employer, and that is still the case," said Aetna spokesman Walter Cherniak. "The only difference now is, we have a federal law that says you have to buy something."
Aetna has a walk-in office in downtown Coral Gables where bilingual staff work primarily with Miami-area business owners and insurance agents. "It’s a great location for businesses," said Shannon Roberts Carmona, a Weston-based Aetna executive who oversees medical insurance marketing in Florida. "It has a little bit different flavor from what Florida Blue Cross and Blue Shield does. They tend to put theirs near malls."
Carmona said Florida is a promising growth market for Aetna’s individual medical insurance that "has done very well. It is absolutely one of our top markets," especially for high-deductible plans with low premiums.
"When we first started selling these plans back in 2006, we were selling lower-deductible based plans,’’ Carmona said. “They were in the range of $1,500 to $5,000. Now our best selling plan is a $10,000-deductible plan," she said. "If we would have introduced that in 2006, people would have said, ‘What are talking about? No way!’ ... The environment of Florida has changed because people have lower incomes, and they need low-premium products."
But she also said it’s unclear whether the individual mandate of the Affordable Care Act will lead Aetna to underwrite more individual insurance policies in Florida: "All of those things are under discussion right now. I couldn’t tell you how many or if there will be more."
Among other uncertainties, Aetna and other private insurers have doubt about the future shape of publicly administered medical insurance exchanges. By 2014, the health reform law will require each state to set up an online insurance exchange or, by default, adopt a national exchange. States have until Nov. 16 to notify the federal Department of Health and Human Services of their choice. Gov. Rick Scott has been leading Florida to the default option of adopting a national exchange for medical insurance.
The Affordable Care Act also allows states to extend Medicaid eligibility to people who receive as much as 133 percent of the federal government’s definition of poverty-level income. But Scott has decided against expanding the Medicaid program in Florida. So it’s unclear whether people who would have gained eligibility will automatically get subsidized medical coverage through an insurance exchange, said Linda S. Quick, president of the South Florida Hospital and Healthcare Association in Hollywood. "In states that don’t expand the Medicaid program, will people with 100 to 133 percent of the federal poverty level automatically be given subsidized care through the exchange? It’s one of the questions that the American Hospital Association has pending with" the U.S. Department of Health and Human Services, Quick said.
The exchanges are supposed to serve as shopping tools for individuals and small employers. Insurers that participate in the exchanges would be required to present their medical plan benefits in a standard format for easy comparison. The online exchanges are likely to be "a little bit like Orbitz for health insurance," Quick said. "You’ll put in what it is you want, and a matrix will come up ... You go to the box that meets your needs and see how much it costs."
That is cheaper than marketing individual coverage through storefronts. But face-to-face marketing may become more important as healthcare reform encourages more uninsured individuals to get coverage. A study by professional services firm PricewaterhouseCoopers found that the estimated 30 million uninsured American under age 65 who will get coverage as a result of the Affordable Care Act are less educated and more likely to speak a language other than English than people who already are insured.
Community service could become a more ubiquitous theme in the mass marketing of medical insurance. For example, at the Florida Blue Center in Miami, the insurer stages an open-house event each month, a healthcare fair that is open to the public, and provides attendees, both customers and non-customers, with a free personal health assessment, including measurements of their body fat percentage, blood pressure, blood sugar and cholesterol.
"For several years and continuing now, we also have a health fair program for large employers, where we go on-site and do these same types of activities for large employers," said Thomas, the Florida Blue senior vice president of government and consumer markets. The initiation of monthly health care fairs at the Florida Blue Center in Miami and other cities "was an attempt to make the same services available to members at smaller companies and to individuals."
Florida Blue Centers employ nurses who routinely conduct personal health assessments of policyholders as well as guide their efforts to manage diabetes, lose weight and stop smoking. "It’s an upfront investment in service, but it has a payoff," Thomas said of the storefront concept. The insurer may further expand its network of Florida Blue Centers after it opens the 11th one in Sarasota later this month. "We’re taking a real close look at that right now," he said. "We don’t have specific plans to open more. But we may next year."