Changes in Marketplace competition and television advertising by insurers

• Published in: The American journal of managed care 2021-08, Vol.27 (8), p.323-328
• Main Author: Shafer, Paul R
• Format: Article
• Language: English
• Subjects: Competition; Health administration; Health insurance; Insurance coverage; Monopolies
• ISSN: 1088-0224; 1936-2692
• DOI: 10.37765/ajmc.2021.88723

Study Design: This study links data capturing Marketplace participation (CMS Qualified Health Plan Landscape files) by county and health insurance advertising (Kantar Media/Campaign Media Analysis Group) by media market for the 2014 through 2018 open enrollment periods. Am J Manag Care. 2021;27(8):323-328. https://doi.org/10.37765/ajmc.2021.88723 _____ Takeaway Points Insurers are not picking up the slack as government-sponsored advertising has decreased and are instead behaving in ways that benefit themselves strategically. * Reductions in Health Insurance Marketplace competition leading to a monopoly county resulted in a loss of between 17% and 38% of the population-weighted average of private advertising during open enrollment. * We find no relationship between a county becoming competitive (going from 1 insurer to 2 or more insurers) and changes in total private advertising. * This implies a potential 1-sided effect, with total private advertising dropping when markets become a monopoly but not necessarily increasing when markets become competitive. _____ The state and federally run health insurance exchanges established under the Affordable Care Act (ACA), collectively referred to as the Health Insurance Marketplace, entered their eighth open enrollment period at the end of 2020. The Trump administration ended television advertising and severely cut funding for enrollment assistance for the Marketplace prior to the 2018 open enrollment period, cuts that persisted until the administration's end in 2020.7 Federal officials in the Trump administration noted "diminishing returns" to television advertising, in opposition to their own leaked internal research, arguing that a shift toward online advertising was a better use of resources as the novelty of the ACA and Marketplace as part of the American health insurance landscape had worn off.7,8 This argument that the public is broadly aware of the Marketplace was repeated in a 2019 Congressional hearing, in which it was asserted by some that insurers could fill the hole that states and the federal government have left as their advertising declined or disappeared.9 Although one-fourth of Marketplace enrollees for 2020 were new customers (suggesting they had at least some awareness), millions of Americans each year may transition into eligibility for subsidized Marketplace coverage who were never previously enrolled in it, including by aging out of parental coverage, losing employer-sponsored coverage through