Medica Provides Health Care Alternatives to the Newly Laid Off

February 6, 2009

From: Medica ads targeting the newly laid off
Minneapolis / St. Paul Business Journal
by Chris Newmarker Staff Writer
February 6, 2009

See Dot com PR

Medica this weekend is launching a statewide marketing campaign to tell laid-off workers that it might be cheaper for them to find new health insurance than to stay on their former employers' plans.

Of course, those alternatives include Medica health plans. But the Minnetonka-based insurer says it will direct the jobless to state programs, and even to competing plans, if it believes they are better options.

"Being a not-for-profit allows us to do some things that are much more investing in the consumer's outcome versus our desire just to sell them a product," said John Chomeau, a vice president at Medica in charge of health plans for individuals.

The federal Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows laid-off workers to temporarily stay on their former employers' plans.

The measure has become increasingly important for the millions of Americans losing their jobs as the recession deepens, and yet there is a big drawback: Former employers no longer pay for the plans, so laid-off workers need to spend a lot more on the coverage.

"While many workers have the right to purchase such coverage, the cost is often prohibitively high," the Washington, D.C.-based advocacy group Families USA said in a recent report.

The steep cost is enough of an issue that Congress is considering subsidizing COBRA premiums to make them more affordable—a measure included in the economic stimulus plan.

Minnesotans on COBRA plans pay an average $375 per month for individual plans and $1,070 per month for family plans, according to Families USA.

Medica plans on average cost $150 per month for an individual and $400 for a family.

"When an employer [lays off] an employee, they'll have a fairly robust toolkit around COBRA. But that's it. They don't provide a lot of alternative choices to their employees at that time," Chomeau said.

Medica isn't disclosing how much it is spending on the campaign, which will include spots on Twin Cities radio stations, billboards and print advertisements in the Minneapolis Star Tribune, St. Paul Pioneer Press and other local publications.

The campaign, designed by Minneapolis-based branding agency Level, features Web addresses that are long run-on sentences meant to reflect the anxiety of laid-off workers worried about their health insurance.

"We wanted to demonstrate that Medica is really empathetic," said Kim Thelen, vice president of strategic planning and client service at Level. "The idea is how to grab people's attention in this situation."

The advertisements include a toll-free number—(866) 633-8285—to get in touch with Medica health care advisers to look at options.

Medica also will spread the word through upcoming job fairs and more than 60 area networking groups for the unemployed. It's even reaching out to local coffee shops to include the message on coffee cup sleeves.

One of Medica's largest competitors, Blue Cross and Blue Shield of Minnesota, has no immediate plans to run COBRA-related advertising campaigns, though it is posting a link about the issue on its Web site home page. A HealthPartners spokesman didn't know about the insurer's plans as of press time.

Roger Feldman, a professor of health policy and management at the University of Minnesota, thinks Medica's marketing idea is pretty unique.

"I don't know if it's a public service, but it's smart. I think it's a good thing because the COBRA option is so bad," Feldman said.