Another Day Another Delay

Does anyone get the feeling that all the delays and the second part of certification not ready that the feds want to load all the company's plans on healthcare.gov and have people go there first to see if they can bypass the agent and see if they get the enrollment they anticipate? Then slap us all in the face?

Absolutely . . . . I've always felt that the ultimate plan is to cut us out altogether. They are simply giving lip service to saying agents & brokers are an important part of this because they are soooo not ready & their precious navigator scheme isn't panning out. After awhile I don't see where insurers will have money to really pay agents with all of the expenses they'll incur just to comply with the law over time - but, maybe I'm wrong . . . .I don't know, but I think it may be a good idea to have a "plan B", just in case.
 
After awhile I don't see where insurers will have money to really pay agents with all of the expenses they'll incur just to comply with the law over time - but, maybe I'm wrong . . . .

MLR allows 20% for administration & profit.

$1,000 premium = $200 admin/profit

then the law causes the rates to spike

$1,500 premium = $300 admin/profit

then the law and adverse selection causes the rates to spike

$2,000 premium = $400 admin/profit

ad nauseum

With these spiking rates, insurance companies that keep their MLR at 80% will have fun spending all that dough in the 20% category. Keeping your eye on the dollar figures, not the percentage helps you see that the carriers will have plenty of money to pay for admin & profit, plus pay us a fair commission. As the rates go up, their administrative expenses do not increase. Rent costs the same, payroll, printing, IT Tech... all those costs are fixed and increase at the rate of inflation. A few costs are tagged to medical inflation, like reinsurance for instance. But most of it is not. The cost of processing a claim does not increase just because the price of the medical service increased. Keep this in mind if/when carriers claim that costs to comply with PPACA means they have no money left over to compensate us fairly.
 
Well, also keep in mind that carriers who participate in the exchanges initially will be subsidized to do so, but will eventually have to kick in a % to participate to cover the actual costs of running the exchange. That will come out of the overhead/administration figure as well. I just think that once companies have reduced commissions as they did when MLR reporting was first required, there's really no going back . . .They'd have to lose market share or something for that to change. We'll see . . .Hope I'm wrong.
 
They don't get subsidized unless there is a loss, cadylou. And even then it's based on the percentage of policies they have within the state on a prorated basis.
 
ok Stuy - I didn't know that. So I guess they have to kick in unless they are losing $$? I guess I don't fully understand how the funding will work going forward (but, that's just the tip of the iceberg of what I probably don't fully understand!)
 
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