It's official: the Affordable Care Act (or Obamacare, depending where you sit on the political spectrum) has been upheld by the Supreme Court as of this morning. While the announcement certainly wasn't the proudest moment for cable news networks (easy on the trigger there, fellas!), it's likely to be very good indeed for television as a whole.
Pivotal Research senior researcher Brian Wieser (formerly the top forecaster at Interpublic) has a solid predictive track record, and he's extremely bullish on the possibility of a rapidly expanding healthcare category on television and in other consumer media as the hotly contested individual mandate becomes a reality in 2014. Individual healthcare policies are the exception, rather than the norm, but if everyone in the country is required to have some kind of coverage, the number of those policies sold is going to skyrocket. That, said Wieser, means new business models.
What will probably happen at first, according to the analyst, is that a single company will grab a lot of attention when it rolls out an effective campaign. "A reference point could be the auto insurance market until the last decade," said Wieser. "It was a lot of smaller companies, and then Geico catalyzed the entire sector. It will make a huge difference in market share."
Since health insurers market mostly (sometimes exclusively) to businesses, there's a steep learning curve ahead for big insurance companies that don't yet have a consumer-friendly infrastructure. "These marketers are going to have to reorient themselves from being B2B brands to being consumer brands," said Wieser.
And it's worth noting that some of them have already started to do just that. Last April, Cigna bgan its pivot toward consumer-focused advertising by hiring Hill Holiday to handle its needs in that department; the company also rolled out its "Go You" campaign a few months later (see link above). Meanwhile, WellPoint has hired Interpublic agency Deutsch, also with a conumser focus in mind, and even earlier—in May 2010—Humana retained Omnicom.
"I'd be surprised if you see them in next year's upfront, but I think you'll see a little in the fall of 2013, more in 2014, and a lot more in 2015," said Wieser. Still, health insurance advertising increases may be a safe bet, but there's no guarantee that it will be a net gain of the $1 billion-plus that Wieser predicts the market will eventually reach. "Health insurance goes up and maybe it makes it more difficult for soft drink manufacturers who were, uh, on the other side of the health proposition," said Wieser with a laugh.
It's also probably safe to expect the larger insurers to start retaining the larger advertising agencies; consumer ad spending hasn't yet been a priority, but the Kaiser Family Foundation (a nonpartisan nonprofit that lobbies on behalf of the health insurance industry and is formerly affiliated with Kaiser Permanente) predicts that the number of individual policy holders in the U.S. will at least double from 14 million to 28 million by 2016.