Insurance industry is betting lots of money that Obamacare is here to stay


More than a few Republican politicians are still entertaining notions that the Affordable Care Act might yet be repealed or otherwise neutered, but companies with lots of skin in the game seem to think otherwise.

As Deep Throat of Watergate fame once put it, follow the money.

Steve Benen EXPLAINS:

It may seem counter-intuitive to think private insurance companies, hardly a reliable ally of the Obama White House, are poised to help give the Affordable Care Act an important boost. But that’s exactly what’s about to happen.
We talked two weeks ago about the strange bedfellows. The L.A. Times reported that industry complains a lot, but “since 2010, they have invested billions of dollars to overhaul their businesses, design new insurance plans and physician practices and develop better ways to monitor quality and control costs. Few industry leaders want to go back to a system that most had concluded was failing, as costs skyrocketed and the ranks of the uninsured swelled.”
To that end, private insurers, eager to enroll millions of new customers, has readied a major investment in making “Obamacare” work. The Wall Street Journal  reports this morning that the industry’s plans are finally being implemented.
A malfunctioning HealthCare.gov website and confusion over canceled policies have kept millions of Americans from choosing new health plans so far this fall. But with website access improving and the initial deadline to sign up for coverage looming Dec. 23, insurers are starting to blanket the airwaves and social media with glitzy ads urging consumers to buy their plans.
WellPoint Inc. – which has held off for weeks on a planned campaign as problems with the website made it impossible for many consumers to sign up – said it expects to spend up to $100 million by the end of this year on TV, social media and print ads targeting mostly young and healthy people – the consumers it covets most because their premiums will help offset the medical costs of older, sicker policyholders. […]
The enrollment surge has compelled some insurers to snap up TV ad time, said Scott Roskowski, director of business development at TVB. “It’s already very noticeable that the December pace has begun to pick up” with insurer advertising, Mr. Roskowski said. TVB projects that insurers will spend about $500 million on ads on local TV stations in 2014.
This is, as Paul Krugman noted, “the shoe we’ve all been waiting to see drop.” If the industry expected the Affordable Care Act to collapse – or at a minimum, struggle badly for the foreseeable future – insurers would wait on the sidelines. If the industry expected “Obamacare” to succeed, they’d quickly get in the game, competing for consumers’ business before their rivals could snatch up prospective customers.
Now that insurers are poised to spend a half-billion dollars in advertising, it appears the industry is confident the system will prevail.
To hear Republicans tell it, “Obamacare” is in some kind of death spiral, from which there is no recovery. In reality, the ACA reached its nadir a month ago, and is bouncing back quite nicely.


  1. The insurance companies have no choice.

    The ACA is not going away and if the insurance companies are going to have any chance of surviving they MUST sign up younger, healthier members. If that doesn’t happen the entire house of cards comes crashing down and they are done.

    The comment about the ACA reaching it’s nadir is ridiculous. The functionality of the exchange online sign up process may have reached its nadir, but that is only a minor component of what the ACA is all about. In reality, the entire reform process won’t reach its most critical point until next year at this time.

    • My gut feeling, based on my own experience with signing up for Obamacare, tells me when people get their 2014 taxes done and find they were assigned the wrong tax credit, thus owe money or they became ineligible for Medicaid or the tax credit due to increase or decrease in income, is when people are going to see how complicated this set up is.

      I not only only have to concern myself with how to grow my business but how that possible growth will affect my tax status as those credits will be even’d up when the 2014 filings are made. The IRS is going to act as the watchdog for this program as they will be the one assessing peoples eligibility based on projected income. Many of us don’t know what our income is going to be from one year to the next and will cause lots of churning between the various tax credit levels and their associated insurance programs to being put into or out of the expanded Medicaid program and vice versa.

      Since big pharma and the insurance industry wrote the ACA, I wonder how much they were looking at the ease of use as opposed their increased revenues that this bill would provide them.

      I am not all happy with this change. Wanted to be, but the more I find out about how it works and its basically a welfare program that I have to provide even more data to the government to review and meet eligibility requirements for, the more I want to distance myself but can’t because I can’t the new insurance rates that aren’t discounted under the ACA. Time will tell.

Leave a Reply

Your email address will not be published. Required fields are marked *