Health Book of Business

[Double D]

"What state are you in?
It's in the Southeast.
**********************
Is it really that difficult to tell us which state you are in? Is this some sort of strange guessing game we're playing here?

Now why do you think I don't want to disclose the state? Not really hard to figure out.

 

[Ann H]

No problem, Obama said there are only 57 states anyway.

If your state is in the FFE (Federally Facilitated Exchanges), then the govt will allow the carriers to set the commission and pay it directly to you. If your state is doing their own exchange, you can ask your state about this issue. Most states are accepting broker business in their exchanges and including commission for that business.

 

[pcbinsurance]

I haven't the foggiest Double D. You're brand new here, nobody has any idea who you are, and it matters which State to answer your questions. Do you think you're the only person who has been offered a health book lately?

 

[Ann H]

Naw, PCB. You're in Florida, which is a southeastern state, and I think he has reason to be afraid that you will search through the names of tens of thousands of health agents to buy this book of business out from underneath him for 1.6 multiple on $600,000 of revenue that will all disappear in 8 months anyway.

 

[pcbinsurance]

I apologize for my cantankerous attitude. I do believe I have a bad case of the Mondays.

 

[Ann H]

No worries. You would have a bad case of the Tuesdays if you paid 1.6 multiple for $600,000 of evaporating business!

 

[David Block]

As was previously mentioned, unless you can support group and individual clients, all of this will blow up too fast for you to recover your investment. Those with high premiums, on the individual side, might qualify for subsidies on the exchange. Some of the small group might find better exchange offerings or could have issues if they are over 50 lives.

If you are not up-to-date on these issues or do not have someone in house that is, even if they gave you the business, you would spend more time and effort getting up to speed than making a living.

 

[somarco]

Just a wag, but depending on the exact makeup, exact state, etc. I would say it is worth 25% of annual revenue.

If I were to sell my non-Medicare block today I would feel good if I got 50% and would probably get drunk and throw a party if someone offered me 1.6x

 

[pahealthquotes]

be very very careful

Image:

 

[2112Greg]

To answer your question "...how are the exchanges going to effect the commissions going forward", we would need to know if your state is part of the Federally Facilitated Exchanges, or one that will set up their own exchange.

To cross sell those people for other lines, you will need to show them support through the transition to Obamacare. Otherwise, they are just going to be angry that you (and the prior agent) left them stranded. The groups in particular will feel this way.

But basically, to answer your question, commission in 2014 will probably be similar to the level it is now, and most states have agreed to pay commission even for Exchange business. However, you need to rewrite all those cases in order to get that commission. Are you planning on becoming an Obamacare expert to help your individuals and groups? As for groups, we expect a good number of them to drop the coverage and allow all their employees to seek individual/family coverage in the exchange or in the private market.

That means the renewal commissions for all that business (except the grandfathered portion and the Med Supps) are gone on 1/1/2014 or the renewal thereafter. If you don't plan to rewrite all those cases personally in the exchange or private market, then it's gone.

In the last few years, I was interested in buying books of business from agents who left the health insurance field. But now, all that business is up for grabs for free, so I don't know why I would spend money to buy it. If I was going to do that, I would look at it like a list of leads, not a book of business, and the sales price would be much lower. But since Obamacare will come with millions of people displaced from their current insurance and needing to purchase new insurance, I don't know why I would pay for leads either.

^^^ This.

Great post, Ann.