An Open Letter To Insurance Executive Lurkers.....

[InsuranceGuy29]

I think it's safe to say that this has been the most chaotic year of insurance for us all.....insurers and agents/brokers, alike. Many regulations and laws were passed that have harmed both of us.

Many of these regulations and laws, we know, don't make a lot of sense, and are going to cause much damage to the industry and our clients. Essentially, I think it's safe to say that we have all been divided in our own self-interests, as well....forcefully, and to no fault of our own, due to these changes.

As an agent/broker, I think I can safely speak for pretty much everyone here when I say that a LOT of damage has been done that's going to be very hard to repair. Almost all trust is gone, from our perspective. BUT, that doesn't mean you can't start re-building this trust, and this very vital relationship you have with brokers.

I believe a lot of companies panicked and just started making cuts to whatever, wherever. This is not good for the longevity and vitality of your business, as it MASSIVELY hurts your reputation among us agents and the clients.

Some companies were obviously damaged much more than others. WellCare.....all I have to say is, an immense amount of good luck to you long-term, because you're definitely going to need it.

For the other insurers, you can redeem yourselves. WellCare, unfortunately for them, made the very stupid decision to steal our earned renewals, which we worked tirelessly and immensely hard over the years to earn.

This is shortsighted, and very unintelligent. The damage they have done to their own company will take a generation to recover from. A few other insurers chose to cut future commissions on many plans, while also simultaneously cancelling popular plans and not cross-walking these clients of ours to other plans they have available.

This also is a major slap in the face to us agents, as this is almost the same thing as stealing from us. As agents/brokers, we take your mandatory ethics class sections, and we now laugh in disgust, as you are no one to be preaching ethics to us. This is just where we're at.

As President Donald J. Trump has now just been chosen as the President Elect, again, I predict a lot of stability and money is going to come flowing back into the industry, but please understand that we will not be forgetting who did what to us. My recommendations going forward would be pledges to release plans that ALL pay commissions, always.

If you don't really want people on a plan, then don't offer it. Simple. When you put plans out, and then don't offer agent pay, a HUGE red alarm goes off in our heads and we then don't trust you at all. We start to think you're probably going to make this a regular thing, and we don't know if you will choose to do this to plans that we have many people on.

Another recommendation would be, if you are going to cancel a plan, then AUTOMATICALLY crosswalk these people into the next best plan you have. We agents/brokers work tirelessly long hours. I'm on my 15th work hour today.......on a Saturday.

We do not have time to be going out to all of these people to simply change them from one plan to another plan, simply because you chose to end the plan. We work hard to BUILD UP business, and we do not appreciate having it torn down literally overnight. Crosswalking protections need to be in place.

Finally, pledges in writing to never steal our previous earned renewals would be the absolute most important thing. This business is built upon trust, and this is the ultimate betrayal to us. No matter which way you cut it, it's theft.

If you're having trouble, we all know you can raise a small copay here or there to pay for it. There are many things you can do to work around monetary challenges. Theft is NEVER an excuse. We are doing a very important job for you and we have to be paid. Period.

Like us or not, you need us to drive in sales and to retain these folks. These people trust us like family, and we can turn almost an entire book of business over to a new company in a month. I don't say that as a threat, simply as a matter of fact.

I will also extend an olive branch, and I will say that I understand the government was a major cause of a lot of this chaos, but you should have just worked with us, not panicked, and not started yanking commissions away from us. Sit down in good faith and speak to us and negotiate with us. That's all we ask. These decisions that many insurers made were EXTREMELY short-sighted.

I understand there will always be some challenges in the industry, if new administrations come in that are not exactly friendly to insurance, like Biden/Kamala, but we have to work TOGETHER to overcome them.

This is a total cohesive team, or at least it should be......insurance companies, FMO's, agents/brokers, etc. Our goals are all the same....to help our client stay happy/well-insured and to make money.

Part of being a good executive is the ability to think ahead. We should have a lot of stability for at least the next 5-6 years or so. Make some adjustments in the anticipation of a future administration that may not be so friendly to us, in order to stay ahead of the game, monetarily.

I think all the insurance companies, agents, and FMO's should also be lobbying the government hard for some major changes to star ratings. Many areas of star ratings are extremely good and vital to make sure the plans are still accountable and doing right by the client.

However, I was recently made aware that one company lost an enormous amount of money because literally 2 calls were dropped and because one of their reps had a very hard time understanding a secret shopper who was faintly screaming in another language, and they didn't know what interpreter to try and get for them.

This kind of clown world nonsense needs to end. Dings like this cost the companies an immense amount of penalty money, and in-turn, there is less money to go around to the companies, in order to pay us our wages, and to bolster the plans to make them better for seniors.

I thank you for your time, and I hope the future steps you take will solidify our relationship going forward. Please understand that from here on out we will be watching every step very closely, as this has been a huge wake-up call to us all, but we have to take steps to rebuild what has been torn down the past 4 years.

 

[annon123]

OK so my response to your letter is long. Sorry.

My first comments may partly explain why agents are being ignored by short sighted insurance companies. The second addresses the problems specifically why with increasing copays isn't going to help

Ignoring agents issue:

Often companies have to, unfortunately, learn things the hard way when their quarterly reports come in and/or they see their stock prices affected and/or market share drop. Now it is the financial people who typically rise to the top of business these days. It used to be those in operations and the focus (and training) of people with those career paths are somewhat different. And of course MBA classes emphasize the focus on finance and the company's obligation to the shareholders as a priority which affects decision making too.

This also leads to an increased emphasis on the short term and less willingness to reduce profits now to gain further out in the future (one of the issues with cutting agent commissions now coupled with the fact that most seniors sign up through agents). This has resulted in kicking everyone other than the shareholder needs and priorities further down the priority list when making decisions. At times, more often than most of us would like, companies forget to look at unintended consequences of their decisions in choosing a particular decision in advance of implementing it (or even in advance of choosing it). Likely this is one of those times.

I am guessing since such a low percent of seniors change their plans each year they figured the risk was small for losing existing clients if they stopped paying agents:

Medicare Beneficiaries Rarely Change Their Coverage During Open Enrollment | KFF

During the Medicare open enrollment period for 2020, Medicare beneficiaries had an average of 24 Medicare Advantage prescription drug plans and 28 stand-alone Part D prescription drug plans to choose from for their coverage. Despite having so many Medicare options, relatively few Medicare...

www.kff.org

Couple that with the fact that the boomer generation has around 12,000 people retiring daily this is still a "growth" sector due to demography. The boomer bubble reaching 65 won't top out until 2030. As life span is lengthening due to medical care, even though the next generations are smaller, the affect of that is going to be lagged (so still a lot of people buying 65+ insurance products). Once the numbers start to drop dramatically then I would guess that suddenly agents (since most enroll through agents) will become more important as competition increases between insurance companies for a shrinking business.

Of course if government and insurance company decisions make it more expensive and/or harder due to networks or who accepts any form of medicare to get medical care/buy meds shrinks faster than one would expect due to age cohort sizes, any decisions that brings down lifespan and will speed up the fall out that there will be fewer people in the generations under the boomers.

I am reasonably sure companies aren't going to think through these long term issues carefully in advance for two reasons:
1) Demography is taught by economists and not so much so in finance, management, strategy classes, etc. (add to that the short term focus that tends to happen).
2) This is still a growth market (not a stable one or shrinking one) due to the boomer population bubble that is far from done yet.

The upside of that for those of you whom are younger is your importance as an agent will eventually grow since roughly 10-15% of seniors sign up for this stuff themselves and the rest use agents.

Raising copays issue:

The problem with raising copays though to solve company financial issues are two fold:
1) The financial one: With the cap on out of pocket that isn't going to increase the amount of money coming in as it is still going to be capped at $2000 from copays from meds.
2) The medical one: A fairly large percentage of seniors already aren't taking all their meds due to costs. The group that has the most problems with this are those who miss the premium "financial aid" out there (or don't have Medicaid too) yet don't make enough over these income limits to pay all their bills comfortably. I read somewhere it is those who are (if I recall correctly) the seniors 200-400% of the poverty line that have the most problems paying their bills. This would just make that problem worse upfront even though they'd hit the cap sooner.

Of course I am not totally convinced that the government wants the poorer elderly to live longer. If they don't the budget saves on social security, medicare A, to a lesser extent B and D subsidies, HUD, SNAP, and Medicaid. There are a fair number of wealthier lawmakers who can't imagine having to choose between meds and, for example, food. It is likely don't actually understand the practical implications of issues that raise costs for seniors above and beyond general overall inflation computed social security raises.

The formula for SS increases also doesn't reflect how senior spending is different than how they figure the general inflation number. If they did that inflation for seniors would be deemed higher and social security increases would be higher. Also the formula only looks at inflation in one quarter and not for the entire year. As a result if it drops in that quarter vs the rest of the year SS goes up less that it could if the entire year is factored in. Also the cost of living where someone lives isn't factored into this either which means some seniors are impacted more than others depending on the cost of living where they live.

US inflation still slowing, but not fast enough for seniors

The spotlight focused on this week’s consumer price report to see if it raises more questions about the Fed’s decision to cut rates so aggressively at its mid-September meeting.

www.oxfordeconomics.com

All of this is relevant because decisions aren't make in a vacuum, the impact of decisions aren't made in a vacuum, and unfortunately often companies/the government have to learn somethings the hard way. Nearly everyone else suffers when this happens.

 

[DNicholsIns]

Agents are putting in long hours and facing tough conversations with clients because of these decisions. Some companies seem to have panicked, making cuts without fully considering the impact on trust and relationships. And yes, when companies cancel or adjust plans without ensuring a smooth transition, it creates extra work for us and disrupts the client’s experience.

 

[LurkerBroker]

I think it's safe to say that this has been the most chaotic year of insurance for us all.....insurers and agents/brokers, alike. Many regulations and laws were passed that have harmed both of us.

Many of these regulations and laws, we know, don't make a lot of sense, and are going to cause much damage to the industry and our clients. Essentially, I think it's safe to say that we have all been divided in our own self-interests, as well....forcefully, and to no fault of our own, due to these changes.

As an agent/broker, I think I can safely speak for pretty much everyone here when I say that a LOT of damage has been done that's going to be very hard to repair. Almost all trust is gone, from our perspective. BUT, that doesn't mean you can't start re-building this trust, and this very vital relationship you have with brokers.

I believe a lot of companies panicked and just started making cuts to whatever, wherever. This is not good for the longevity and vitality of your business, as it MASSIVELY hurts your reputation among us agents and the clients.

Some companies were obviously damaged much more than others. WellCare.....all I have to say is, an immense amount of good luck to you long-term, because you're definitely going to need it.

For the other insurers, you can redeem yourselves. WellCare, unfortunately for them, made the very stupid decision to steal our earned renewals, which we worked tirelessly and immensely hard over the years to earn.

This is shortsighted, and very unintelligent. The damage they have done to their own company will take a generation to recover from. A few other insurers chose to cut future commissions on many plans, while also simultaneously cancelling popular plans and not cross-walking these clients of ours to other plans they have available.

This also is a major slap in the face to us agents, as this is almost the same thing as stealing from us. As agents/brokers, we take your mandatory ethics class sections, and we now laugh in disgust, as you are no one to be preaching ethics to us. This is just where we're at.

As President Donald J. Trump has now just been chosen as the President Elect, again, I predict a lot of stability and money is going to come flowing back into the industry, but please understand that we will not be forgetting who did what to us. My recommendations going forward would be pledges to release plans that ALL pay commissions, always.

If you don't really want people on a plan, then don't offer it. Simple. When you put plans out, and then don't offer agent pay, a HUGE red alarm goes off in our heads and we then don't trust you at all. We start think you're probably going to make this a regular thing, and we don't know if you will choose to do this to plans that we have many people on.

Another recommendation would be, if you are going to cancel a plan, then AUTOMATICALLY crosswalk these people into the next best plan you have. We agents/brokers work tirelessly long hours. I'm on my 15th work hour today.......on a Saturday.

We do not have time to be going out to all of these people to simply change them from one plan to another plan, simply because you chose to end the plan. We work hard to BUILD UP business, and we do not appreciate having it torn down literally overnight. Crosswalking protections need to be in place.

Finally, pledges in writing to never steal our previous earned renewals would be the absolute most important thing. This business is built upon trust, and this is the ultimate betrayal to us. No matter which way you cut it, it's theft.

If you're having trouble, we all know you can raise a small copay here or there to pay for it. There are many things you can do to work around monetary challenges. Theft is NEVER an excuse. We are doing a very important job for you and we have to be paid. Period.

Like us or not, you need us to drive in sales and to retain these folks. These people trust us like family, and we can turn almost an entire book of business over to a new company in a month. I don't say that as a threat, simply as a matter of fact.

I will also extend an olive branch, and I will say that I understand the government was a major cause of a lot of this chaos, but you should have just worked with us, not panicked, and not started yanking commissions away from us. Sit down in good faith and speak to us and negotiate with us. That's all we ask. These decisions that many insurers made were EXTREMELY short-sighted.

I understand there will always be some challenges in the industry, if new administrations come in that are not exactly friendly to insurance, like Biden/Kamala, but we have to work TOGETHER to overcome them.

This is a total cohesive team, or at least it should be......insurance companies, FMO's, agents/brokers, etc. Our goals are all the same....to help our client stay happy/well-insured and to make money.

Part of being a good executive is the ability to think ahead. We should have a lot of stability for at least the next 5-6 years or so. Make some adjustments in the anticipation of a future administration that may not be so friendly to us, in order to stay ahead of the game, monetarily.

I think all the insurance companies, agents, and FMO's should also be lobbying the government hard for some major changes to star ratings. Many areas of star ratings are extremely good and vital to make sure the plans are still accountable and doing right by the client.

However, I was recently made aware that one company lost an enormous amount of money because literally 2 calls were dropped and because one of their reps had a very hard time understanding a secret shopper who was faintly screaming in another language, and they didn't know what interpreter to try and get for them.

This kind of clown world nonsense needs to end. Dings like this cost the companies an immense amount of penalty money, and in-turn, there is less money to go around to the companies, in order to pay us our wages, and to bolster the plans to make them better for seniors.

I thank you for your time, and I hope the future steps you take will solidify our relationship going forward. Please understand that from here on out we will be watching every step very closely, as this has been a huge wake-up call to us all, but we have to take steps to rebuild what has been torn down the past 4 years.

How about the unintended consequences these actions have on Medigap? Plan exits open the doors to an SEP giving everyone the ability to now get a Medigap plan. Common sense tells you when dealing with an insurance product you don't sell flood insurance 24-hours before the planned storm surge and expect to be covered yet this plays out day in and day out with Medigap impacting those who bought the insurance ahead of time. Cmon CMS or States.... do better!

 

[scagnt83]

Agents said the same thing about ACA.

Carriers margins got squeezed, they cut renewals on grandfathered business. Agents got upset and swore to never work with those carriers again.

Health Insurers did not care then, I doubt they care now.

 

[rousemark]

Agents are putting in long hours and facing tough conversations with clients because of these decisions. Some companies seem to have panicked, making cuts without fully considering the impact on trust and relationships. And yes, when companies cancel or adjust plans without ensuring a smooth transition, it creates extra work for us and disrupts the client’s experience.

A lot of chronically ill people will migrate to med supp which will affect claims ratios and raise premiums. Speaking from experience, MA is a good deal for n healthy people. Not so much for sick people .

 

[annon123]

A lot of chronically ill people will migrate to med supp which will affect claims ratios and raise premiums. Speaking from experience, MA is a good deal for n healthy people. Not so much for sick people .

And, of course, the fundamental underlying problem of then presuming you can migrate when you are no longer "healthy" and have medical issues is medical underwriting.

 

[InsuranceGuy29]

A lot of chronically ill people will migrate to med supp which will affect claims ratios and raise premiums. Speaking from experience, MA is a good deal for n healthy people. Not so much for sick people .

I hear you on the migration, but disagree on the not being good for sick people. I've had numerous people with cancers, chronic diseases, etc. on them with no issue. It just depends on the area of the country and the strength of the plan. It's tough to make blanket statements on Medicare Advantage because the plans can be so different and things can vary a lot by the area of the country you're in.

 

[rousemark]

I hear you on the migration, but disagree on the not being good for sick people. I've had numerous people with cancers, chronic diseases, etc. on them with no issue. It just depends on the area of the country and the strength of the plan. It's tough to make blanket statements on Medicare Advantage because the plans can be so different and things can vary a lot by the area of the country you're in.

I have experienced both. The MOOP with most plans is greater than the annual premiums for a plan G and PDP... even at my age 80. Then you have the problems of networks, preauthorizations, etc. I needed home health care with OM and there was no problem getting for as long as needed. When I needed it with the MA they only approved 18 visits for nursing, Occupational, Speech and Physical therapies. Then they would not accept the HHC agencies recertification. Plus, there was only one HHC agency in network in my area and it was the worst in the area. The nurses and therapists were great but the administration was horrible.

 

[rousemark]

And, of course, the fundamental underlying problem of then presuming you can migrate when you are no longer "healthy" and have medical issues is medical underwriting.

If their MA shuts down in their area they do not have to pass underwriting.