Magic Johnson Joins ‘Drunk Kitchen’ Chef Touting Obamacare

Photographer: Earl Gibson III/Getty Images
The appearance of Earvin Johnson, 54, on the TV commercials is part of the effort to raise awareness. The commercials, which are being paid for by the federal Centers for Medicare & Medicaid Services, won’t be the only ones featuring athletes.

Magic Johnson, who is living proof of the value of early medical detection with health insurance, is broadcasting that message on behalf of Obamacare.

The basketball legend, a member of the 1992 U.S. Olympic “Dream Team” and improbable early HIV/AIDS survivor, appears in television commercials that begin airing today as part of a push to get young adults to sign up for coverage. The ad, soon to be followed by one featuring retired Miami Heat player and kidney transplant recipient Alonzo Mourning, will air on ABC (DIS), ESPN, TNT and NBAtv, is funded by the federal government.

New data show that 18- to 34-year-olds made up 24 percent of Obamacare enrollees in the first three months, far below the level the White House wants to reach by a March 31 deadline.

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With less than three months to go, the administration and its allies are ratcheting up organizing efforts in 25 cities such as Dallas and Miami with the largest uninsured populations among states covered by the federal online insurance exchange.

An online campaign includes a six-hour YouTube live-stream event today with some irreverent personalities. Among them: Adam Ward, a mixed martial arts fighter who once bragged about the taste of his opponents’ blood after a bout, and Hannah Hart, a comedian who hosts “My Drunk Kitchen,” a video series in which she cooks while intoxicated.

Photographer: Joe Raedle/Getty Images

People try to purchase health insurance under the Affordable Care Act at the kiosk setup at the Mall of Americas in Miami on Jan. 15, 2014. Close

People try to purchase health insurance under the Affordable Care Act at the kiosk... Read More

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Photographer: Joe Raedle/Getty Images

People try to purchase health insurance under the Affordable Care Act at the kiosk setup at the Mall of Americas in Miami on Jan. 15, 2014.

Critical Component

Enroll America, an advocacy group promoting enrollment that’s closely allied with the White House, hired 66 new paid field organizers this month, boosting its staff by a third.

The participation of younger adults is critical because they typically have fewer health problems and can help offset the cost of care for older and sicker people.

The Fate of Obamacare

Critics of the Affordable Care Act, Obama’s signature legislative initiative, derided the skew toward older enrollees when the demographic data was released this week. Brendan Buck, a spokesman for House Speaker John Boehner, an Ohio Republican, declared enrollment by young adults “a bust so far.”

Dan Mendelson, chief executive officer of Avalere Health LLC, a Washington-based health-research firm, said the trajectory “is on the right track,” though he predicted the administration would “fall a little bit short” of a 39 percent ratio of young adults it set as a goal last year.

“It will be OK, and the premium increases for next year will be moderate,” Mendelson said.

Massachusetts Model

The pattern of enrollment when Massachusetts opened the state insurance exchange that is the model for Obamacare’s online marketplaces suggests younger and healthier people will be the most likely to wait until the deadline to buy insurance, Mendelson said.

In Massachusetts, 24 percent of people who signed up in the first six months of the 11-month open-enrollment period were under 35, according to an analysis by professors at Harvard University, the Massachusetts Institute of Technology and Wellesley College. That number jumped to 34 percent during the final month for participants to avoid a financial penalty for going without insurance.

Even in the debut year of President George W. Bush’s Medicare Part D prescription drug benefit, healthier beneficiaries were most likely to wait until the deadline neared to enroll, Mendelson said.

Avoiding ‘Spiral’

A Kaiser Family Foundation analysis last month found that, even if young adults accounted for as little as 25 percent of Obamacare participants, the policies were unlikely to fall into a “death spiral” of escalating insurance rates that discourage participation by healthy beneficiaries. Under that scenario, claims costs would be only 2.4 percent higher than premium revenues, according to the analysis.

The health law allows insurers to charge older people as much as three times the premiums of younger beneficiaries compared with an average of five times previously, according to Kaiser. Young adults typically receive the highest government subsidies under the law since the aid is based on income.

Still, the demographic mix of the insurance pool matters less than health status of those who enroll, said Robert Laszewski, president of Health Policy and Strategy Associates LLC, a consulting firm based in Alexandria, Virginia.

The 2.2 million people who enrolled in private health insurance through Obamacare as of Dec. 28 and 3.9 million others who have signed up for Medicaid plans for the poor represent only a small fraction of the 48 million Americans the U.S. Census Bureau estimated were uninsured in 2012, Laszewski said. That raises the possibility that those who enroll will be disproportionately sick, he said.

More People

“This business of demographics is just way overstated,” Laszewski said. “The single biggest driver toward a good mix is size of the population. In order to get the balance, we’ve got to get many, many more people than we’ve got.”

WellPoint Inc. (WLP), the second-biggest U.S. insurer, is confident in the exchanges even with their early rollout fumbles, Chief Executive Officer Joseph Swedish told investors at a conference this week in San Francisco.

“Despite the near-term uncertainty, we believe exchanges will be growing as a big part of the market,” Swedish said. Insurers are “re-turning on the jets” after suspending their marketing push last year, said Marc Pierce, founder of Chicago-based Stonegate Advisors. The company advises Blue Cross plans and national carriers on communications strategy.

“They need to generate awareness” among young people, Pierce said. “You still have a lot of people that don’t know anything about reform. That hasn’t changed.”

Johnson’s Commercial

The appearance of Earvin Johnson, 54, and Mourning, 43, on the TV commercials is part of the effort to raise awareness. The ads, which are being paid for by the federal Centers for Medicare & Medicaid Services, won’t be the only ones featuring athletes. More sports figures will appear to promote enrollment as the Winter Olympics approach, administration officials say.

Johnson was diagnosed as HIV positive in 1991. Mourning was diagnosed with kidney disease in 2000 and received his transplant in 2003. Both athletes said they discovered their conditions and received treatment because they had health insurance.

“I was at the top of my game,” Mourning says in the ad. “I felt invincible. But when I went for my regular team physical, it turned out I had serious kidney disease. It was caught in time to treat. And lucky for me, I was insured.”

Learning Curve

Insurers also are relying on TV and radio campaigns as well as search-engine marketing and other online appeals. Young people seem less interested in hearing from insurers through Facebook (FB) or Twitter, although those channels provide data for how to sell young people on insurance, Pierce said.

The industry is still “pretty optimistic” about attracting younger people, though there’s the steep learning curve that insurers face in retail sales, Pierce said.

“For many of them, this is a year of experimenting,” Pierce said. “They are much more familiar in selling through brokers and employers, and going direct-to-consumer is very foreign to most of the plans.”

Price is key, Pierce found. In focus groups, young people were open to buying insurance once they learned plans could be found on the exchanges for $100 a month or less, with subsidies.

Obamacare advocates also have been honing their tactics and narrowing their marketing message to focus more on premium levels.

Public Unaware

Sixty-nine percent of uninsured adults aren’t aware that subsidies are available to buy insurance, according to a study conducted last month by the research firm PerryUndem for Enroll America. The most common reason given by people who hadn’t checked the online marketplaces was they believed they wouldn’t be able to afford the insurance, according to the study.

Simple adjustments the advocacy group has made in targeting Internet advertisements have boosted the number of people they are bringing into online exchanges by 63 percent and reducing the cost per consumer by 92 percent, according the Adam Stalker, the group’s national digital director. The group connected more than 8,000 consumers during the week of Dec. 9-15, the most recent period for which they have data, he said.

Their field organization has increased the number of uninsured people contacted per volunteer shift by 20 percent. That came as they improved their approach, reducing door-to-door canvassing and expanding on-site efforts at barbershops, grocery stores, churches and free clinics, Stalker said.

Focusing e-mail pitches on the price of insurance and subsidies has raised the response rate by two-thirds, he said.

“I definitely think we’ll be more effective in this second half,” Stalker said. “Not just us, but every organization is learning more about consumers.”

To contact the reporters on this story: Mike Dorning in Washington at mdorning@bloomberg.net; Alex Nussbaum in New York at anussbaum1@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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