Study Shows That Cutting Obamacare Ads Hurts Enrollment
The Donald Trump administration is slashing government funds for advertising the Affordable Care Act (alternatively called Obamacare), saying that spending tax money on advertising the program is useless. Empirical evidence, however, suggests otherwise.
The administration is proposing to cut spending on Obamacare ads by a whopping 90%, which could be bad news for the country, where rising healthcare costs remain a grave concern.
According to recent research carried out in Kentucky, a state that slashed its budget for advertising Obamacare last year, a correlation has been found between lower amounts of advertising and subsequent lower sign-ups for health insurance.
The research compared the periods before and after advertising was cut and found that the ads had encouraged more Americans to seek information on medical insurance.
Before Republican governor Matt Bevin took over the state government, Kentucky was spending money on advertising Obamacare. But, once Bevin took office in December 2015—that is, midway through the open enrollment period—he cut all state spending for the ads.
Research found that enrollment in Obamacare fell from 106,300 in 2015 to 93,700 in 2016, when Bevin slashed advertising funding partway through the enrollment period. Enrollment in fiscal-year 2017 fell further to 81,200.
“Our analysis tells us that state-sponsored television advertising was a substantial driver of information-seeking behavior in Kentucky during open enrollment –– a critical step to getting consumers to shop for plans, understand their eligibility for premium tax credits or Medicaid, and enroll in coverage,” wrote the researchers.
For insurers, low signups resulting from limited access to information are concerning. Although insurers are able to easily find unhealthy Americans signing up for healthcare insurance, getting healthy people to sign up becomes increasingly challenging in the absence of advertising.
Consequently, the outcome is damaging for all Americans. With the insurance pool getting dominated by sick and injured Americans, it is easy to guess that insurance premiums will shoot up for all Americans.
“What happens when you cut Obamacare advertising? Let’s ask Kentucky.” Vox, September 5, 2017.