Aetna Buys Humana for $37B

[scagnt83]

In states that have one carrier, (it's usually the Blues), there is no agent commission.

Exactly.

Although in retrospect BCBS might have to consolidate first and then take over the 1 or 2 competitors that are left. Although if Anthem buys out a national carrier they will have an even stronger case to take over the other regional Blues, since they would have a national reach already in place.

 

[G.Gordon]

That makes me sick.

 

[toddoxley]

That makes me sick.

Compression of carriers means changes in agent compensation. See attached. Limited states at this time but changes are coming for sure. About a year or so ago now I had a BCBSAZ manager state that they were surprised to learn that agents did not speak to individual clients very often after the initial sale and questioned the validity of ongoing renewal compensation.

 

[scagnt83]

Compression of carriers means changes in agent compensation. See attached. Limited states at this time but changes are coming for sure. About a year or so ago now I had a BCBSAZ manager state that they were surprised to learn that agents did not speak to individual clients very often after the initial sale and questioned the validity of ongoing renewal compensation.

That attachment is interesting. I actually think it might be a good thing if presented correctly to a group sponsor.

I didnt see anything about a cap on the Producer Service Fee...

 

[KennyWest]

points to ponder...

1. With consolidation of carriers feds approving is more likely due to laws surrounding monopolies or scenarios close to. Look at scrutiny applied during recent news of possible acquisitions/mergers of cell carriers or DirecTV and otehrs.

2. Consolidation could be a good thing; i.e. small number of carriers who must then compete (or stay more competitive) to not only the end consumer (insured) but also to the retailer (agents) since fewer players. Think Boeing v. Airbus. Both industries saw consolidation and since much more dramatic advances in products and pricing (relevant to each other and taking inflation into account).

Just some other points to ponder.

In any event; if approved even they say it wont happen until mid/late 2016 and that is just the completion of the acquisition. If they were to then shift to where were not competitive damned sure feds will step in.

 

[healther]

Commissions will most likely be stripped, at a point. Compression makes sense for the carrier, especially if they can compress out all competition and eliminate the financial need for commissions.

Regionally Speaking... There are too many agents that don't bring any value to the table. I believe we need more stringent requirements for licensure in our state.

 

[GreenSky]

Commissions will most likely be stripped, at a point. Compression makes sense for the carrier, especially if they can compress out all competition and eliminate the financial need for commissions.

Regionally Speaking... There are too many agents that don't bring any value to the table. I believe we need more stringent requirements for licensure in our state.

Nationally speaking - I don't believe licenses should even be required. Insurance companies need to be 100% responsible for the actions of all they allow to sell their products. Government licensing is just a cash cow for the states and means nothing.

Rick

 

[healther]

Nationally speaking - I don't believe licenses should even be required. Insurance companies need to be 100% responsible for the actions of all they allow to sell their products. Government licensing is just a cash cow for the states and means nothing.

Rick

In theory, I wouldn't disagree. But I've cleaned up too many mis-represented limited benefits plan to agree with your theory. There is a real need for oversight.

Edit: I'm speaking to state doi's, so nationally I don't disagree with you.

 

[GreenSky]

In theory, I wouldn't disagree. But I've cleaned up too many mis-represented limited benefits plan to agree with your theory. There is a real need for oversight.

That government oversight hasn't stopped bad agents from selling bad plans. The oversight should be toward the companies, not the individuals.

Of course, much of the issue is because carriers "own" the departments of insurance and certainly own CMS. Humana threw indy agents under the bus rather than taking responsibility for their own failings.

There should not be a reason for government intervention if carriers actually were responsible for our actions. I agree with you there should be more stringent requirements to sell insurance. But those should be enforced by the carriers, not a government agency.

Rick

 

[healther]

That government oversight hasn't stopped bad agents from selling bad plans. The oversight should be toward the companies, not the individuals.

Of course, much of the issue is because carriers "own" the departments of insurance and certainly own CMS. Humana threw indy agents under the bus rather than taking responsibility for their own failings.

There should not be a reason for government intervention if carriers actually were responsible for our actions. I agree with you there should be more stringent requirements to sell insurance. But those should be enforced by the carriers, not a government agency.

Rick

To your point, I have seen good carriers reject bad agent's request for appointment.