Those who pay the penalty have nothing to show for it

April 1, 2011

The managed care industry is missing a potentially rich opportunity to draw in consumers with the message that health insurance provides protection and peace of mind for the healthy as well as the sick.

The managed care industry is missing a potentially rich opportunity to draw in consumers with the message that health insurance provides protection and peace of mind for the healthy as well as the sick. That message will become more important in the months leading up to 2014.

INDIVIDUAL MANDATE UNPOPULAR

Whether the individual mandate survives the judgment of the Supreme Court or heated political opposition, Americans are simply opposed to the idea of it. No one has given them a reason not to be.

If you ask me, it's a marketing issue.

Half of Americans say they oppose the mandate, according to a recent Harris Interactive and HealthDay survey. When asked if they agree with the idea that "it is necessary to include people who are healthy in order to help pay for those who are sick," 71% say they do.

So Americans aren't sold on the idea of buying insurance, per se. Spreading the risk is okay with them, but they don't like being told to buy a product specifically.

When families are faced with a decision to buy something they're not particularly fond of at $14,000 a year or pay a $2,500 penalty instead, they're going to make a purely economic decision. Unfortunately, they get nothing in return for their $2,500.

There's your opportunity.

It might take celebrities, social networking hooks and more, but selling the healthy and the sick on the benefits of your plan might be the only way to lure in lives and tamp down adverse selection. Few plans are investing in consumer campaigns because they're assuming their marketing needs will actually go down when shoppers arrive on the exchanges.

CURRENT POLICY SHOWS PROMISE

Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology, recently released a whitepaper with the Center For American Progress, in which he concludes that the mandate is necessary and will be effective, in fact, more effective in terms of cost and coverage than any of the alternatives proposed thus far. He's studied the impact of the individual mandate in Massachusetts and saw that with a penalty of just $200 in the first year a lot of people signed up for insurance plans.

"Americans are actually pretty law abiding people," he said at a press conference announcing the paper. "If you have a law that says you have to have health insurance, by and large, people will obey it."

Perhaps he's right. But consider the opportunity to position health coverage as more than just mandated obedience. Begin now on some innovative plans to pitch your products to the healthy and the sick.

Julie Miller is editor-in-chief of MANAGED HEALTHCARE EXECUTIVE. She can be reached at julie.miller@advanstar.com