Marketing State Insurance Coverage Programs: Experiences from Four States
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State Coverage Initiatives
Marketing State Insurance
Coverage Programs:
Experiences from Four States
Prepared by:
Ann Volpel
Asher Mikow
Todd Eberly
State Coverage Initiatives is a national program of
the Robert Wood Johnson Foundation administered
by AcademyHealth.
November 2007Marketing State Insurance Coverage Programs: Experiences from Four States
Executive Summary success of certain marketing strategies depends 3) Plan design encourages, but does not
In many states, both legislators and executive largely on the structure of each state’s individual assure, enrollment – Programs that offer
branch officials are facing increased pressure from coverage program, including whether there is premium subsidies can make the purchase of
constituents to address the lack of affordable health a role for brokers and agents in marketing the coverage much less costly to employers and
insurance and the growing number of uninsured. product, whether the target population includes employees. Officials observed, however, that
In response, states are implementing a variety only uninsured individuals, and whether the some employers and employees still considered
of state coverage initiatives, including Medicaid initiative is built on ESI. Despite these variations, their share of the subsidized premiums to
expansions, tax credits, and employer and employee the following conclusions were evident and may be too costly. States should be mindful that
subsidies that support the purchase of employer- provide useful information to help states more heavily subsidizing a product does not assure
sponsored insurance (ESI). States that establish effectively market their programs. enrollment. Some in the target population
health insurance coverage initiatives, however, are still may be priced out of the market and
finding it difficult to reach enrollment targets. A Lessons Learned others may be unwilling to pay their share of
diverse eligible population, misconceptions about 1) Marketing and public awareness requires the premiums to obtain coverage. The latter
eligibility criteria, and a resource-intensive education a multi-faceted approach – There is no may be especially true for younger, healthy
and enrollment process are just some of the simple answer to addressing the challenge of populations—precisely those needed to offset
challenges states must overcome. creating public awareness. Spreading the word adverse selection from sicker enrollees who
to a diverse and dispersed target population benefit most from premium subsidies.
This issue brief examines marketing and enrollment requires states to use a number of creative
strategies in four states that have implemented strategies. State officials, agents, and brokers 4) Agents and brokers should be involved in
coverage initiatives. It attempts to draw some reported that word of mouth, working with the program – Agents and brokers should
conclusions on “best practices.” The University of local chambers of commerce, and news be viewed as valuable assets with expertise
Maryland, Baltimore County’s Center for Health coverage of elected officials discussing the in both the health insurance industry and
Program Development and Management (Center) programs generated the greatest amount of the preferences of small group employers.
conducted telephone interviews with state officials public awareness of the coverage initiative. States can use brokers to provide input into
and health insurance agents and brokers from the design and administration of coverage
Arizona, Montana, New Mexico, and Oklahoma 2) The application and enrollment process initiatives. Compensating brokers at market
to elicit information about the relative success of requires support and multiple entry rates is an effective strategy for encouraging
various marketing strategies. This work builds on a points – States should provide applicants them to market the product. Where statutes or
more in-depth assessment of insurance coverage with multiple entry points into the program, regulations prevent competitive compensation,
programs that the Center completed in March such as through participating health plans, continuing education credits and use of the state
2007 for the federal Health Resources and Services agents or brokers, and state offices. States program as a “foot in the door” to new clients
Administration (HRSA) and AcademyHealth.1 That must then provide ample technical assistance may encourage agent and broker participation.
assessment compared program design, financing, to retain those who have applied as the In addition, states should capitalize on the
affordability, and program administration for six application process may be cumbersome distribution networks of the commercial
state coverage initiatives. and confusing to applicants. Furthermore, carriers that agents represent as an efficient
small group employers are unlikely to have means to reach target populations. Brokers can
It was clear from this round of interviews that human resources staff who are experienced in also be invaluable to small group employers
marketing state coverage expansion programs evaluating health insurance options. and individuals by acting as a liaison to the
is a challenging undertaking. Furthermore, the state, assisting in plan selection, and facilitating
program enrollment and renewal.
2Introduction successful. Most of the data presented here, and have not offered coverage for at least 24
In March 2007, the Center completed a therefore, are impressions based on experience months. This issue brief focuses primarily on
report2 for the Health Resources and Services by state officials, brokers, and agents. That the purchasing pool. The target population
Administration (HRSA), an agency of the U.S. said, the enrollment numbers in most states for Insure Montana is small businesses with
Department of Health and Human Services, and are relatively low and the number of program between two and nine employees whose salaries
AcademyHealth on the practical experiences of staff within each state is generally small. So, for are below $75,000 (excluding the owner of
a select group of states that have implemented many states, a sophisticated tracking system may the company). Premium assistance is offered
private and public insurance coverage products not yield significantly more data than general to both employers and employees to purchase
intended to be more affordable for low-income impressions from administering the program on coverage through one of two plans offered by a
workers. The study included an in-depth a daily basis. commercial carrier. The program is funded by a
assessment of insurance coverage programs in cigarette tax. Enrollment began in January 2006
six states and compared state approaches in four The issue brief begins with an overview of each and, as of May 2007, the purchasing pool had
key areas: program design, program financing, state program. This is followed by a discussion enrolled 735 small employers with 5,100 covered
methods to keep the program affordable, and of the primary challenges that states face in individuals. Insure Montana has a waiting list
program administration. The six states included marketing insurance coverage programs and an of interested businesses, but does not currently
in that study were Arizona, Michigan, New analysis of marketing and enrollment strategies have adequate funding to expand enrollment.
Mexico, New York, Oklahoma, and Utah. that states have used in an attempt to overcome
those challenges. The brief concludes with a New Mexico. The New Mexico State Coverage
This issue brief builds on that initial report by discussion of the role of agents and brokers and Insurance (NMSCI) program began enrolling
examining in more detail two aspects of state a summary of lessons learned. small employers (those with 50 or fewer
coverage initiatives: marketing and enrollment. employees) and individuals on July 1, 2005.
The analysis addresses two important questions: State Program Descriptions The program provides access to a statewide
Arizona. The Healthcare Group of Arizona managed care system primarily targeted to
1) what lessons can be learned from states that (HCG) was created in 1985 to provide employers and low-wage employees, although
have pursued coverage expansions about how affordable and accessible health care coverage low-income unemployed individuals are also
to successfully market the product to eligible to sole proprietors, small businesses with 50 allowed to participate. Individuals must have
employer groups and employees; and or fewer employees, and political subdivisions family incomes below 200 percent of the
(cities and towns). The program was initially federal poverty level (FPL) to qualify for the
2) what strategies can states pursue to bring funded by a grant from the Robert Wood program. NMSCI is a Medicaid and SCHIP
enrollment closer to projected targets? Johnson Foundation. It was expanded statewide expansion program. It is funded via New
in 1993. Full-time employees and dependents at Mexico’s unspent SCHIP funds (including the
For this issue brief, we conducted telephone qualifying firms are eligible to participate in the required state match) as well as with employer
interviews with state officials and health program. There is no means testing. As of April and employee contributions. The managed care
insurance agents and brokers in four states to 2007, there were 26,498 individuals covered by coverage is provided by MCOs that are selected
elicit information about the relative success of HCG, which was below the January 2007 target through a competitive bidding process in the
various marketing strategies. The information of 43,381. HCG is a state-sponsored public- Medicaid managed care program; NMSCI is
presented in this brief is based on those private partnership that is operated under the administratively an extension of that program.
telephone interviews, as well as information Arizona Health Care Cost Containment System Because of its low rate of ESI coverage among
presented in the initial report. No additional (AHCCCS) and is totally separate from the small businesses, New Mexico opted not to use
data collection was done. The states included in state’s Medicaid and SCHIP (State Children’s an ESI model. Although the benefit package
this study were Arizona, Montana, New Mexico, Health Insurance Program) programs. The for NMSCI is similar to a comprehensive
and Oklahoma. state contracts with private managed care commercial plan, it has a $100,000 annual
organizations (MCOs) and a statewide preferred benefit limit. As of December 2006, the New
One of the challenges of preparing a brief on provider organization (PPO) for insurance plans. Mexico State Coverage Insurance Program had
this topic is the variability in program design For the 2005/2006 budget year, the program enrolled 4,623 covered individuals.
across states. The success of certain marketing was self-funded with premium dollars. In April
efforts, such as the role of brokers and agents, 2007, HCG announced its intention to request Oklahoma. The Oklahoma Employer/
will depend heavily upon the structure of the additional funding from the state legislature to Employee Partnership for Insurance Coverage
insurance product and whether there is a role for cover a reported deficit. (O-EPIC) consists of two programs: the
brokers and agents in marketing and enrollment. Premium Assistance Partnership Program (ESI)
General information about how variations in Montana. Insure Montana, authorized under and the Premium Assistance Public Program
program design affect marketing and enrollment the Small Business Health Care Affordability (Individual Plan). The focus for this issue
strategies is presented in the brief. Act, was signed into law with bipartisan support brief is ESI, a program directed at small group
in May 2005. Insure Montana comprises two employers. The target population is adults with
Only one state included in this analysis indicated programs: a tax credit program for small incomes under 200 percent FPL who work for
that it had a data management system that would businesses in danger of losing health insurance small employers (an employer with 50 or fewer
allow the state to track the source of referrals to coverage, and a purchasing pool for small employees). A Health Insurance Flexibility
determine which marketing efforts were most businesses that do not offer insurance coverage and Accountability (HIFA) waiver program,
3Marketing State Insurance Coverage Programs: Experiences from Four States
O-EPIC is funded via federal matching Medicaid A lack of dedicated human resources staff. question varied. Some respondents suggested that,
funds, state tobacco tax funds, and individual Many small employers do not have human rather than expressing concern, people (especially
and employer premiums. ESI utilizes the private resources departments with staff who are employers) were grateful that “the government”
insurance market and subsidizes the cost of knowledgeable about the intricacies of the health recognized the problems that small businesses face
health insurance premiums for employees. The insurance marketplace. As a result, state program and was doing something to make health insurance
state’s goal is to allow market forces to determine staff, agents, and brokers reported that they more affordable. Other respondents acknowledged
the benefit package and to integrate eligible spend considerable time educating employers that some employers were reluctant to offer a
employees with the private insurance marketplace and employees about health insurance programs benefit to their employees through this program
rather than have them depend on state health and assisting them with the necessary paperwork; because they were concerned that funding would
programs. Premium Assistance began enrolling in effect, acting as the small employer’s human not last long-term and their employees would
beneficiaries in November 2005 and had enrolled resources department. This additional time spent expect them to continue providing the benefit
2,500 individuals as of May 2007. An additional educating each individual employer group comes once the state subsidy had ended. Nearly all of
200 businesses have been approved to participate, at the cost of spending additional time and those we interviewed suggested that if they heard
but have not yet enrolled anyone. effort marketing to potential new enrollees. such concerns, they worked hard to convince the
This also requires a level of understanding on potential enrollees to take advantage of the program
State Coverage Program the part of program officials regarding the while it was available.
Marketing Challenges intricacies of the small group market and the
States with insurance coverage expansion needs of small employers. Some of the agents and brokers suggested that
programs face a number of challenges in reaching enrollment may be lower than projected because
uninsured populations. These problems include, Influencing program design and product employers do not realize that their employees
but are not limited to: designing products that will appeal. The strongest marketing strategies may meet the income guidelines set by the various
target populations not already eligible for existing not succeed if the product being offered is not state programs. Several respondents remarked
program expansions under Medicaid or SCHIP; appealing. Program and product design issues that that income disregards, in particular, are hard to
identifying limitations in the existing insurance affect successful enrollment include competitiveness explain in marketing materials. Employers also
market; and designing programs that will expand with commercial products (in price as well as may not be aware of their employees’ personal
coverage rather than crowd out an existing public benefit design), broker incentives (to encourage circumstances that may impact eligibility (e.g.,
or private market. With regard to outreach, marketing and product promotion), ease of number of children, other sources of income).
marketing, and enrollment, an additional set of enrollment, and whether the product design is States need to make extra efforts to explain
challenges were consistently referenced by those attractive to all employees in a group or is targeted income and asset guidelines in ways that
interviewed for this brief: or priced to assist only those for whom commercial encourage potential enrollees to discuss their
products are not available or affordable. That said, specific situations with a knowledgeable official
• A diffuse target population decisions regarding program design and product or broker who can address eligibility intricacies.
• A lack of dedicated human resources staff appeal are often outside of the control of the state
• Influencing program design and product agency administering the program. Legislation and Brokers and agents, in particular, reported
appeal regulations at both the federal and state levels may that some employers were reluctant to “take a
• Shaping public perception impact the design of the program. States need to government handout” or have the “government
consider how to highlight the program’s benefits involved in my business.” They reported
A diffuse target population. By design, most state when developing an outreach strategy. reluctance on the part of some employers to
coverage expansion programs target small group share information with state agencies necessary
employers (often defined as those with 50 or fewer Shaping public perception. The key to any for the administration of the program. Coverage
employees). States are challenged, therefore, with advertising and marketing campaign is shaping the programs that maximize the use of commercial
identifying venues that will reach a concentration public’s perception of the product. State coverage products and rely heavily on agents and brokers
of small group employers. Even if the state expansion programs must address several issues may encounter less resistance with those
successfully does sign up an employer group, related to public perception, including questions concerns as much of the paperwork is handled
enrollment in the coverage expansion will be limited about funding and the long-term viability of the by agents whom businesses know and trust, and
by the fact that it is a small group employer. In fact, program, misconceptions about eligibility, reluctance not by a government employee.
although employers with 50 or fewer employees to get involved in a government program, and a
are allowed to participate in most of the programs, belief among some young, single, or otherwise Finally, some state officials mentioned that they
the experience of the states interviewed for this healthy workers that the cost of health insurance spent considerable time educating the public
brief suggests that the average number of covered outweighs any benefits. about the importance of health insurance and
individuals per enrolled employer group is less than explaining why an individual should build health
five. A significant amount of effort is necessary to One of the questions we posed in each of our insurance premiums into his or her monthly
educate an eligible employer and sign it up for the interviews was whether employers or employees budget. This barrier appeared to be greatest
program, only to enroll a handful of its employees. were reluctant to participate in a state-funded among those with the lowest risk: the young,
The states interviewed faced the additional challenge insurance program due to concerns that the healthy, and mostly single individuals, who often
that their populations were predominantly rural and program might not continue to receive funding see little value in purchasing health insurance.
therefore more geographically dispersed. in future years or a perception that participation Yet this population may be the most critical
would result in increased government involvement population to include in a state coverage initiative
in an employer’s business. The responses to this in order to counteract potential adverse selection.
4businesses, educational sessions offered through through local news outlets. One state cautioned,
Marketing and Enrollment area chambers of commerce or business and trade however, that so many issues compete for a place
Strategies associations, and advertisements in community on a governor’s agenda that such executive level
This section of the brief addresses several of the and economic development newspapers. States advocacy cannot be relied on as a regular marketing
marketing, outreach, and enrollment strategies pursued these efforts because they believed that tool. Another state suggested that its most successful
that have been used by states and includes these venues provided a more concentrated focus outreach efforts had been through press releases
suggestions from both brokers and state officials on potentially eligible employer groups and most that had generated news stories on television, radio,
for maximizing their effectiveness. It discusses states reported success with such programs. and in print.
marketing and enrollment in three phases:
Agents and brokers also supported these Agents and brokers offer “free” advertising for
• Creating awareness of the program strategies. One broker, in particular, very states as well, once they have learned about the
• Marketing the product successfully used direct mail targeted at small state coverage initiative. Agents and brokers are
• Enrolling eligible individuals employers at the inception of the state’s program often the ones talking with potential employers
to identify new clients and build considerable or individuals who are seeking to purchase
Creating Awareness of the Program business. Another broker was eager to partner insurance. This provides a perfect venue for
A first step in marketing state coverage initiatives is with the state to offer educational sessions to creating awareness of the coverage initiative with
creating awareness of the program. As mentioned trade associations to increase awareness of the a captive target population who is interested in
earlier, one of the greatest challenges with marketing product and gain referrals for potential enrollees. purchasing insurance. States should not ignore
state coverage programs is identifying methods for One state offered to share the cost of advertising the opportunity to spread the word through
reaching a diffuse population of potentially eligible with brokers who developed advertisements that agents and brokers using creative methods such
employer groups and enrollees. Both brokers and promoted the coverage program. as sharing advertising costs.
state officials can play important roles in this area.
Success with traditional, more broad-based
Identify your target population. One of the commercial advertising strategies, such as Marketing the Product
questions that a state must answer is whether to television, radio, and billboards, was difficult to Many of the states used their marketing
focus marketing efforts on eligible employers, quantify. One state had only recently pursued campaigns to create awareness of the program in
eligible employees, or both. Because most state this strategy and another was about to launch general and to encourage interested individuals
coverage initiatives define the eligible population by such a campaign in an effort to increase to call a central state office or ask their agents or
the size of the employer group, targeting employers interest, awareness, and enrollment. Traditional brokers about the program. The next phase of
is a natural first step. Employers decide whether advertising campaigns that focus on television, marketing a state coverage initiative is to educate
or not to spend fringe benefit dollars on health radio, billboards, and advertisements in major potential enrollees about the program’s benefits
insurance coverage. Furthermore, depending on the metropolitan newspapers require a considerable and the actual product being offered.
structure of a state’s program, the only pathway to investment and the one state that previously
eligibility may be through ESI. pursued this option suggested that the return on Educate potential enrollees. State officials,
investment was not worth the cost. It is important agents, and brokers agreed that the process
Most of the states focused their marketing efforts to remember, however, that this represents of explaining the advantages of the coverage
on employers, but recognized that public awareness the experience of only one state and a detailed product is time consuming but critical to
of the program could also play an important role examination of the design of the state’s marketing the success of the initiative. As previously
in generating interest among eligible employees campaign was beyond the scope of this brief. mentioned, very few small businesses have access
who may ask their employers to participate. States to human resources experts who understand
were hopeful, and some brokers suggested, that in a Most states reported that they did not have the intricacies of evaluating health insurance
tight labor market employers would recognize that enough money for advertising or ran into coverage options. The issues are similar in states
offering health insurance coverage could improve restrictions on how state funds could be used for where individuals can apply without employer
employee retention. In states where the coverage marketing. Two states reported that the publicity involvement. State officials found a general
initiative does not require employer participation, generated during the Robert Wood Johnson lack of understanding about health insurance,
public awareness plays in even greater role. At least Foundation’s “Cover the Uninsured Week” each
one state reported that 40-60 percent of referrals year increased awareness of their programs,
but that they did not have enough resources to Tips for Successful Marketing:
to its program come from “word of mouth,”
suggesting that people are talking about the program capitalize on that additional publicity. • Maximize the use of brokers to generate
awareness of the program.
in that state and highlighting the importance of
public awareness as a marketing tool. Capitalize on “free” marketing opportunities. • Capitalize on free marketing opportunities
Officials in more than one state reported that news such as Cover the Uninsured Week and
coverage of elected officials (especially governors) publicity from political figures.
Find your target population. Once a state has
mentioning the program generated inquiries • Utilize the distribution networks of
defined the target population, the next step is to
about the program. One state did not even have private carriers who participate in the
find that group. Most of the states interviewed program to reach targeted groups.
employed marketing efforts that were directly to spend money on direct advertising because the
insurance commissioner and the governor had • Avoid using the term “Federal Poverty
targeted to potentially eligible populations. These Level.”
efforts included direct mail campaigns to small spent considerable time visiting areas of the state to
promote the program, resulting in “free” advertising
5Marketing State Insurance Coverage Programs: Experiences from Four States
especially among those who have not recently compensated at competitive rates. fees indicated that they typically marketed the state
had access to coverage—the very population Agents and brokers from many of the states program as an insurer of last resort to individuals
being targeted by these programs. The education complained about the enrollment process, citing who simply could not obtain a commercial
process requires someone to evaluate the cumbersome paperwork, duplicative forms, and product—a practice that results in adverse selection
circumstances of each employer group (or lengthy contracts. They also expressed concerns for the state coverage initiative.
individual) to determine who meets the eligibility about the inaccessibility of state staff to answer
requirements, what the premium costs would their questions and their belief that employers Agents and brokers provided varying accounts
be, and what benefit package, if alternatives are and employees would not be able to navigate of the actual renewal requirements imposed
available, would be most appropriate. the enrollment process without assistance from on program participants. A broker in one
a trained professional. Some brokers suggested state expressed concern that the state was too
Take advantage of agents and brokers. Agents that the state did not recognize the importance lenient during annual renewal and seemingly
and brokers, in particular, stressed their contribution of meeting deadlines through a health insurance allowed enrollment to continue with minimal
to the success of the coverage initiative in this enrollment process. States that are unable to verification of an individual’s continued
area. They believe that their understanding of the make eligibility and premium cost estimates eligibility. This broker also observed that initial
health insurance market, their experience evaluating quickly do not give agents and individuals eligibility verification was very easy. Another
different health insurance mechanisms for dealing sufficient time to evaluate the costs and benefits broker, in the same state, reported that the
with the unique needs of clients (especially small of state programs versus private plans. If process of initial eligibility verification was very
employers), and their familiarity with health states cannot provide and process enrollment difficult and described state officials as treating
questionnaires was invaluable. Agents and brokers information in a timely manner, employers and all applicants as ineligible and requiring that
interviewed for this brief also observed that state agents may simply choose a private plan with they prove otherwise. This broker described
program offices had limited staffing and that a known cost rather than gamble on the state- the annual renewal process as equally difficult.
agents and brokers served as extensions for that subsidized premiums being lower. While this These starkly different assessments of the same
staff. In states where the coverage program is only problem was not universal, the key message was state initiative may be indicative of inconsistent
available through ESI sold by agents and brokers, clear: states should do everything possible to program administration or may simply reflect
their role is obviously critical. In these states, agents make it easy on agents, brokers, employers, and the general impressions of two unique brokers.
and state officials have access to insurance carriers’ employees to enroll in these programs. Agents and brokers in most states described the
existing distribution networks in order to market annual renewal process as either less difficult
the program. Working with agents and carriers, States were mindful of these concerns and or no more difficult than the initial eligibility
therefore, offers states the opportunity to reach state officials reported working on many verification process.
targeted employers effectively and efficiently. For levels to address perceived duplication and
example, one agent reported that a participating administrative burden in order to facilitate the States considering a coverage initiative must be
insurance carrier provided agent training sessions enrollment process. In many cases, states must mindful of the renewal process when designing
and produced marketing materials, at no cost to the balance the fair implementation of regulations a program. As with the initial eligibility
state, for the state coverage program. with administrative simplicity. States that built verification, the renewal process should not
their coverage expansions from their Medicaid be so cumbersome or time consuming as to
Enrolling Eligible Individuals programs faced the additional burden of having dissuade continued participation, but neither
The final step is to enroll eligible individuals in to verify citizenship. should it be so minimal that individuals no
the program. In all of the states we examined, longer eligible for coverage continue to receive
state officials maintained a key role in evaluating Facilitate renewal. Many of the agents and publicly subsidized coverage. This is especially
eligibility criteria (e.g., income, citizenship, brokers raised issues related to the annual renewal true in states with limited program funding and
and residency). Agents and brokers may also of enrollment in the state coverage initiative enrollment caps, where continued enrollment of
be involved in enrollment, depending on the program. In some states, agents and brokers ineligibles likely would result in the exclusion of
structure of the coverage initiative and how the get paid the same commission as they do when newly eligible individuals.
individual was referred. initially enrolling an individual or group. In other
states, agents and brokers are paid nothing on
Streamline the enrollment process. Strategies renewal. With agents and brokers often filling the
More Tips for Successful Marketing:
for making enrollment as easy as possible are role of human resources staff, the effort required
important. It is possible that once you have to enroll a small employer in a state coverage • Offer continuing education credits to bro-
kers that attend training sessions on the
convinced someone to take advantage of the initiative may exceed that of enrolling an employer
state coverage program.
health insurance product offered through the in a private market alternative. States that offer a
state initiative, they will tolerate a burdensome public coverage product are frequently prohibited • Offer to list brokers’ names on the
program website if they participate in a
enrollment process; however, a state may lose from paying agents and brokers anything other
minimum number of training sessions.
prospective enrollees if the perception forms than a one-time fee upon initial enrollment. The
that the enrollment process is cumbersome. absence of a traditional commission and an annual • Ask brokers who sell the product to agree
to attend one training session each year.
Furthermore, agents and brokers who find renewal commission (all standard in the commercial
the process frustrating and time consuming market) serves to dissuade agents and brokers from • Share broker marketing costs for materi-
investing the time required to enroll individuals in als that promote the coverage initiative.
will quickly lose interest in promoting the
coverage initiative as an option for their clients, state coverage initiatives. Agents and brokers in
especially if the agents and brokers do not get states that did not offer commercial-equivalent
6The Role of Insurance Agents commissions are much lower in these states for the
and Brokers The interviewees were asked to assess the coverage program than for commercial insurance,
role of brokers or agents in their respective leaving brokers with less incentive to promote
States that pursue coverage initiatives should
programs. Their answers stressed just how the product. Agents and brokers in those states
consider carefully the role that agents and important brokers/agents are:
brokers will play in the design and marketing reported dissatisfaction with commission levels
of the product. Agents and brokers understand • “Important” when compared to the amount of work it took to
the health insurance market and have • “Essential to getting the paperwork enroll an employer group or employee.
experience working with employers to evaluate completed”
health insurance options given the unique As experienced professionals in the health
• “Very important”
characteristics of the employer group. Agents insurance industry, agents and brokers can
• “Underutilized” offer valuable insight into the design and
and brokers also have experience marketing to
small employers and may be better equipped • “Extremely important” administration of a program. In cases where
than state officials and agency staff to deal • “Important to the success of the pro- the targeted population is small employer
with the unique needs and concerns of small gram” groups, agents and brokers may have the
employers. Furthermore, agents and brokers • “Critical” most experience with and knowledge of that
understand the practical realities of enrolling • “Paramount” population’s health insurance needs. Many
employer groups and renewing insurance employer groups rely heavily on the expertise
• “Typically necessary for the selection of agents and brokers to assist them in selecting
products and can offer important insights into of a health plan”
the eligibility and administrative processes of a cost-effective health insurance package, as
state programs. All of these assets can help to well as to help them fulfill the administrative
increase awareness and understanding of the losing income by linking an employer group requirements for eligibility and renewal of state
product, leading to increased enrollment. or an employee to the state coverage program. and private programs. Overall, most of those
While brokers in the states with ESI expansion interviewed regarded the contributions of
Some of the states discussed in this issue brief programs admitted that the state subsidy agents and brokers as important to the success
involved agents early on in the design of the required some additional paperwork, they did of the program.
state coverage initiative, whereas other states not report significant complaints. They realized
incorporated them later in the process. It was that the subsidy is increasing the number of Lessons Learned
clear from our interviews, however, that the role people who are able to purchase insurance and The first lesson learned through this process is
of insurance agents and brokers varies among therefore increasing the broker’s overall sales. that marketing and public awareness requires
the states, in part due to the structure of the a multi-faceted approach. Marketing and
individual state programs. Program design issues Officials in states with state-sponsored programs raising public awareness of coverage initiatives are
that may impact the role of agents and brokers (i.e., coverage initiatives not built on ESI) reported continual challenges for states. The fact that the
include whether the coverage expansion is built a lower percentage of referrals from agents and target population is both diverse and dispersed
on ESI, whether the product is competitive with brokers than states with expansions built on ESI. requires states to implement several creative
commercially available products for uninsured This may be the result of several factors. First, strategies to generate interest in the program.
populations, and what level of commission the agent and broker involvement is not necessary There was little consensus with regard to the best
agents and brokers receive for enrolling and re- in the states with state-sponsored programs. marketing approach and states certainly need to
enrolling individuals. Individuals, sole proprietors, and employers tailor their outreach approach to address the unique
may all work directly with state program staff aspects of their target population and program
In states where coverage expansions build to get enrolled. While state officials recognized design. State officials, agents, and brokers reported
on ESI, agents and brokers play a key role in that brokers and agents could play a key role in that word of mouth, working with local chambers
identifying eligible employers and employees increasing enrollment, their experience suggested of commerce, and news coverage of elected
and enrolling them in the program. Agents that only a handful of brokers were interested officials (especially governors) discussing the
and brokers already are engaged in marketing in marketing the program. In one state, officials programs generated the greatest amount of public
to employer groups and many embraced the suggested that expanding the number of brokers awareness of the coverage initiative.
opportunity to market the state subsidy to educated about the program probably would not
businesses that previously had not been able to have a large impact on enrollment numbers because The second lesson is that the application and
afford to purchase health insurance coverage. a small number of brokers were responsible enrollment process requires support and
for the bulk of the broker-initiated enrollment, multiple entry points. Agents, brokers, and
One factor that may be driving increased while others only brought in one or two cases a state officials in all but one state described their
involvement of agents and brokers in the year. The effort of certifying each broker on an respective eligibility and application processes
two states that built on ESI is that broker annual basis therefore “wasn’t worth it” according favorably. Respondents emphasized the need
commissions in those two programs are to one informant, given the small number of for multiple points of entry, such as through
equivalent to selling a commercial product. In cases they enrolled. There was some feeling, too, participating health plans, agents or brokers, and
fact, the states are not involved in reimbursing that these individual cases represented adverse state offices. Agents and brokers, in particular,
the agents and brokers at all; commissions selection. Another factor that may impact the emphasized that employers and employees need a
are paid by the health insurance companies. number of referrals from brokers in states with great deal of assistance throughout the enrollment
Agents and brokers in these states do not risk state-sponsored programs is the fact that broker process. Small group employers may not have a
7Marketing State Insurance Coverage Programs: Experiences from Four States
dedicated human resources professional, requiring their participation, including offering education About the Authors
the agent, broker, or state officials to spend and certification programs and continuing Ann Volpel is the director of acute care policy
considerable time evaluating eligibility, completing education credits, maintaining a list of program at the Center for Health Program Development
paperwork, and facilitating the enrollment process. certified brokers on the program website, and Management, University of Maryland,
This resource-intensive process may only yield a and sharing advertising costs with agents for Baltimore County. In this capacity, she manages
handful of enrolled covered lives. marketing materials that are specific to the the Center’s initiatives in Medicaid managed
coverage initiative. Said one state official, “it has care policy, financing and evaluation, health plan
The third lesson is that plan design been extremely helpful to have agents involved performance assessment, and healthcare reform
encourages, but does not assure, enrollment. in our program.” analysis. Ms. Volpel directs the Center’s ongoing
In states that offered a subsidy, whether for evaluation and assessment of HealthChoice,
a commercial product or for a state-designed Acknowledgements Maryland’s Medicaid managed care program.
product delivered by a commercial carrier, the This report was completed with assistance
total unsubsidized premiums, as well as the from a number of individuals. Special thanks Ms. Volpel has a master’s degree in public
benefit package, were described as competitive to Isabel Friedenzohn and Enrique Martinez- administration from the Maxwell School of
or consistent with comparable commercial Vidal with AcademyHealth, and to Susan Tucker Citizenship and Public Policy at Syracuse University.
products. As such, the addition of the public at the Maryland Department of Health and She graduated magna cum laude with a bachelor’s
subsidy made the programs much less costly to Mental Hygiene, formerly with the Center for degree in economics from Mount Holyoke College.
the employer and employee than a comparable Health Program Development and Management
commercial product. However, even in states (Center) at the University of Maryland, Asher Mikow, a research analyst at the
with relatively high subsidies, officials observed Baltimore County, for their help in shaping Center, is primarily responsible for working
that some employers and employees still the research agenda for this issue brief and with the Maryland Rare and Expensive Case
considered their share of the premiums to be for providing insightful comments and critical Management (REM) Program, as well as for
unaffordable. This suggests that even a heavily guidance over the course of the project. analyzing state health care coverage initiatives,
subsidized product still may leave some in the Medicaid-related programs, and other state-
target population priced out of the market or A number of state program officials and level policies. Prior to his current position, Mr.
unwilling to pay their share of the premium professionals in the health insurance industry Mikow gained experience with the Center as a
to obtain coverage. Agents and brokers also graciously participated in the development of graduate research assistant.
reported that some employers were unwilling to the issue brief. All were kind enough to share
start offering a benefit with no guarantee that their time and experiences through interviews At the University of North Carolina at Chapel
the subsidy would continue in future years. and correspondence with the authors. We thank Hill, Mr. Mikow earned a master of healthcare
them for their participation and cooperation. administration degree (with a concentration
The final lesson is that involving agents and Key informants are listed below. in finance and financial management) and a
brokers in the program is beneficial on Bachelor of Arts degree. He is currently seeking
many levels. All states but one recognized Key Informants From Each State his Ph.D. in public policy at UMBC.
a significant role for agents and brokers. It is
Arizona
worth noting that the one state to not explicitly Todd Eberly is an Assistant Professor of Public
Jeff Hoopes
embrace the contribution of agents and brokers Policy and Political Science at St. Mary’s College
Michael Malasnik
relies less on the commercial insurance market of Maryland. Prior to his current position,
Mary Steigerwald (Healthcare Group of
in its coverage initiative and has hired its own he was a senior analyst at the Center for Health
Arizona)
sales representatives. The legislature in this state Program Development and Management
also prohibited the program’s administrators where he specialized in program evaluation,
Montana
from paying agents and brokers a traditional Medicaid managed care, the State Children’s
Lisa Crowley (Insure Montana)
commission, limiting their payment to a one- Health Insurance Program, and state-level
Jim Edwards
time fee. Coverage initiatives in the other states healthcare reform.
Tim Garden
make greater use of the commercial market
to deliver care, especially in those states that Dr. Eberly received his Ph.D. in Public Policy
New Mexico
subsidize existing commercial products. As from the University of Maryland Baltimore
Shelley Burt
such, one might expect an enhanced role for County. He graduated cum laude with a
Howard Shaver
agents and brokers. In these states, the agents bachelor’s degree in political science from
Mari Spaulding-Bynon (New Mexico Human
and brokers are viewed as “important factors” Clarion University.
Services Department)
in program success. One state official remarked
that “agent involvement is typically necessary Endnotes
Oklahoma
for health plan selection and enrollment” by 1 This report is available at www.statecoverage.net/pdf/
Nicole Altobello (Oklahoma Health Care HRSAReport0307.pdf.
small businesses. Another official observed
Authority) 2 Efforts to Expand Coverage to the Uninsured: Program
that “the complexity of the small group market Design Challenges and Tradeoffs in Six States available at
Jim Hampton
necessitates broker participation.” Given the www.statecoverage.net/pdf/HRSAReport0307.pdf.
Tyler LaReau
important role of agents and brokers, several
Matt Lucas (Oklahoma Health Care Authority)
states have implemented strategies to encourage
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