ACA Boosts Carriers’ Ad Budgets

As the Affordable Care Act began to reshape the health insurance marketplace carriers’ advertising expenses saw a sharp increase in 2013, according to a study by SNL. The top 15 companies saw advertising expenses grow 15% to $1.2 billion in 2013. Advertising expenses specifically for the health industry jumped 13% to $1.74 billion in 2013.

Morningstar analyst Vishnu Lekraj told SNL that the Affordable Care Act changed the competitive landscape dramatically with public exchanges serving as a platform for smaller regional players to enter the market. Health insurers ramped up advertising toward the end of 2013 to combat these competitive.

Stifel Nicolaus & Co. analyst Thomas Carroll told SNL that WellPoint Inc. and the Blue Cross Blue Shield companies have the most to defend in terms of market share, and their strong existing presence does not exclude them from the advertising arms race to capture new customers in the dynamic marketplace.
WellPoint was one of the largest insurers to make an early push into the public markets. The company also spent the second-most on advertising in the health industry in 2013, spending $274.7 million, up 30.16% from $211.1 million in the prior year. Speaking during a conference call held to discuss fourth-quarter 2013 earnings Jan. 29, WellPoint executive vice president and CFO Wayne DeVeydt said the company had expected marketing expenses to be even higher than they were in the quarter, but that spending on advertising was slowed down because the public exchanges were not up and running as aggressively as the company had anticipated.

UnitedHealth Group Inc. did not push aggressively into the public exchanges in 2013 and is still yet to do so. UnitedHealth spent $141.3 million on advertising in 2013, the third-most in SNL’s analysis. But the company spent significantly less than the $180 million seen in 2012. Lekraj said, “UnitedHealth Group hasn’t made a huge push into the exchange market as of yet, but we expect them to do so and as they make this push, definitely you will see more spending on advertising and just getting their brand out there.” For more information, visit

Last Updated 01/19/2022

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