Future of Small Group Benefit Brokers/Advisors

[Madden9]

I started my own group benefits brokerage about two years ago. I am finding that setting appointments via cold calling in the small group market (2-50 EE) is much more difficult than it was 5 years ago. Is anyone else experiencing this? The effort required to get 1-2 new accounts per month can be daunting. I am willing to go through the struggle, but in the back of my mind I am concerned about the future of the small group health insurance market.

I am curious to get the group's thoughts on the outlook of the small group health insurance market.
Do you think this business will be around for the long-term?

 

[ebayn001]

The bottom has fallen out with cold calling. I have been cold calling for 17 years and it's tough.

I don't think the long term outlook for group health is good. The Democrats want single payer, family premium rates look like mortgage payments, the insurance companies are having a hard time negotiating reimbursement rates with providers, etc.

IMO the group market has 5-10 years before the plug is pulled.

 

[ABC]

I feel your pain on cold calling, the digital gate keepers have demensioned already low closure rates.

I’ve had success in the small group market the last 2 years. Most of the biz is coming from other forms of marketing than cold calling.

I’ve had to bring a lot more to the table than spreadsheets.

As for like expectancy of group health/brokers? The old model of selling a plan and not touching the account is over.

Right now, you have to be offering level funded/self funded plans.

In the next 10 years, I could see the referenced based pricing plans become the plan of choice for groups.

Hang in there, 2020 we will see all the grandmother groups plans terminate. This will create huge opportunity for brokers that are willling to work.

 

[scagnt83]

Small Group as we know it now will be gone within a decade. (imo)

Group agents will still have ancillary lines like dental/vision/life/ltd/std/cancer/etc.
We might possibly have some type of "supplemental" policy to pair with whatever universal payor system we are on.

I started small group over a decade ago. I would not recommend a new agent get involved at this point... unless you only plan on working for the next 5-10 years. Why build a book of renewal income only to have it disappear due to government regulations?

Imo, it is not a stable long term business model. It is not easy to pivot and learn a new niche... especially when you have spent your entire career building up your current niche. Just ask the old Pension Agents from the 80s.... many of them went on to sell individual health insurance... only to be forced to pivot once again

 

[ABC]

I would disagree about a universal healthcare system being the cause of group demise. There is no way the medical community is going to accept Medicare reimbursement rates. Companies will drop group health coverage when costs continue to rise.

There is another factor that will help insurance cost and thatsthe retirement of the baby boomers.

 

[AboutThatLife]

The bottom has fallen out with cold calling. I have been cold calling for 17 years and it's tough.

I don't think the long term outlook for group health is good. The Democrats want single payer, family premium rates look like mortgage payments, the insurance companies are having a hard time negotiating reimbursement rates with providers, etc.

IMO the group market has 5-10 years before the plug is pulled.

The democrats want single payer but what do republicans want?

They have controlled Congress for 8 years and the presidency for 2. If they had a good idea it would have been done by now

 

[scagnt83]

I would disagree about a universal healthcare system being the cause of group demise. There is no way the medical community is going to accept Medicare reimbursement rates. Companies will drop group health coverage when costs continue to rise.

There is another factor that will help insurance cost and thats the retirement of the baby boomers.

I disagree about companies dropping it. Until we have Universal Healthcare, Group Health will be a critical component of running a competitive white collar business.

Imo, employers are even more attached to Group Health now than they were 5 or 10 years ago. At least in the white collar sector. They also HATE having to deal with it... but they see it as a necessary evil.

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I also disagree about Universal happening. Not only is it inevitable, it is the only way to guarantee affordable healthcare to each and every citizen.

And you assume reimbursement rates would be at current Medicare levels. There are lots of reasons that would not be the case.


There is a growing movement to change the current "fee for service" system into a "hybrid" system where a Primary Physician's primary compensation would be a set recurring fee per patient, supplemented by reimbursement for services only over a certain "reasonable and customary" level. Doctors are some of the main drivers of this movement.

And there is a lot of logic in that model. The current model requires TONS of admin for every single interaction. It also creates financial incentives for doctors to run excessive tests.

In the end, it is all 1 pot of money.... the USA... the care is being provided regardless either way... its being paid with US Dollars from someone, somewhere in the USA ... so from an actuarial standpoint... and logistical standpoint.... makes a heck of lot of sense to put everyone in 1 single pool....

 

[Madden9]

Thank you for your responses. Quite a few of you seem to be confirming my fears.

Is the Medicare Supplement business also in trouble with Single Payer, or would the proposed pool be just for people 64 and under?

 

[scagnt83]

Ideally it would be one single pool. Who knows what we will get though. A lot will depend on which political party makes the changes. The current system is not sustainable and will need major reforms over the next decade.

I wouldnt be surprised to see some type of quasi public/private partnership at some point with Big Blue.... maybe they go non-profit nationwide in exchange for it (they already are in many states). Especially if Republican's lead the change. And there would definitely not be agents in that equation, imo.

If the Democrat's make the changes, it will likely look similar to an expansion of Medicare. And there very well could be some type of "supplemental" policy sold to median incomes and above who would likely have greater OOP expenses.

No telling what will happen or how it all will look. Just all a guess. Lots of political risk on the health side these days.

 

[David Block]

For those brokers that are knowledgeable about self-funding, partial-self-funding, and level-funding should do well over the near a long term. Those that are staying with the BUCA model will soon lose their standing with their clients. At least through a level funding model there are plan design options (RBP among them) that allow the client the ability to help stem the tide of "poor health" or declining health by knowing there are those types of claimants in the group. If they so choose, they can start to address the issue(s) with the TPA to determine if there are programs available to educate the employee and direct them to a model of better health.

There are directions we, as brokers, bring to the table for those employers that understand they are not in the healthcare delivery business. These employers don't want to be involved in the process, they just want to have the plan work and the employees health or issue be "taken care of". That is what we can do better than most. Health brokers should have the ability to bring solutions to the client to help drive down cost and usage; to keep renewals down by improving the overall health of the employee population.

There is a lot we can do; there is also much we cannot do. There is no way we can force an employee to lose weight, quit smoking, or take their medication and visit their primary physician. But we can create plan designs that reward that behavior or help the employee make better decisions. There are great challenges and ignoring the "Medicare for All" argument, which could arise at any time, there are other solutions that employers need to know of before we give up the ghost.