Health Insurance Industry Leaders Share Thoughts..

[AllenChicago]

Our agency owner just returned from a leadership meeting where he spoke to several of the health insurance company executives "off the record" after official functions ended for the day.

I can't put on this forum some of the language they used to describe their thoughts of how the government is handling this Health Reform, but I'm sure you can imagine their anger.

The industry feels blindsided by how this administration suddenly on July 14th of this year, unveiled regulations that require all group and individual health insurance policies with an effective date of September 23rd or later, to begin covering HUNDREDS of "preventive" tests, screenings and counselings, with NO Cost-Sharing whatsoever on the part of the insured.
Ref: Rules For Free Preventive Services Requirement Announced - Kaiser Health News

They knew that a few of the most critical wellness tests would be mandated for Sept 23rd, but didn't expect that everything from depression to obesity to smoking cessation would be thrown into the mix.
Ref: Preventive Care Mandates Could Lead to Out-of-Control Costs and Unaffordable Health Insurance Premiums - Business - Press Releases - msnbc.com

On a more positive note.. While the vast majority of health insurance carriers will be cutting commissions effective January 1, 2011, they also expect price increases. The way it was explained to me today, the companies understand the importance of agents and will be re-working their accounting practices so that higher premiums will equate to almost the same dollar commissions, even though the commission percentage is lower. They're working on ways to do this and stay within the (80% Individual / 85% Group) MLR requirement that goes into effect in 2011. It's already being assumed that agent commissions will NOT be included in the cost of providing medical care to insureds.

These next 6 months will be full of fireworks on several landscapes.
-AC

 

[jbage007]

While the vast majority of health insurance carriers will be cutting commissions effective January 1, 2011, they also expect price increases. The way it was explained to me today, the companies understand the importance of agents and will be re-working their accounting practices so that higher premiums will equate to almost the same dollar commissions, even though the commission percentage is lower. They're working on ways to do this and stay within the (80% Individual / 85% Group) MLR requirement that goes into effect in 2011. It's already being assumed that agent commissions will NOT be included in the cost of providing medical care to insureds.

-AC

Precisely. Next year will be great. Even better the next. Then, prepare to go back to selling Tupperware after that if Obamascare isn't stopped cold in its tracks - probably by the courts which is what I'm betting on.

 

[somarco]

higher premiums will equate to almost the same dollar commissions

Current premiums are not affordable for those out of work, under-employed, experiencing furloughs, etc.

Higher premiums will be even less affordable.

Most of my clients are people who, until a couple of years ago, had above average incomes. Many of them are self employed. Some had businesses before the economic decline, others have joined the ranks of the self employed as self preservation.

There is no reason for the carriers, or anyone else, to have been blindsided. Anyone with a brain should have seen this coming.

 

[GreenSky]

There is no reason for the carriers, or anyone else, to have been blindsided. Anyone with a brain should have seen this coming.

Are you suggesting that those who passed the health insurance fiasco along with the insurance company execs who basically said "please, may I have another" might not be terribly bright?

Rick

 

[somarco]

Are you suggesting that those who passed the health insurance fiasco along with the insurance company execs who basically said "please, may I have another" might not be terribly bright?

Street smart execs in home offices are scarce as hen's teeth. Carriers are real life examples of the Peter Principle in action.

And the voters that put Chairman Obama in power aren't any brighter.

 

[medx]

Should be a great year, except for just one little problem... and that is every time you give quote to a possible new Client, you will be 40% more than what they are currently paying on their grandfathered Health Plan, or if they don't have insurance, then your quote will be 40% more than what they can afford, or you can sell them a non-approved plan and make them have to pay the IRS Penalty.

 

[Crabcake Johnny]

Not sure about 40%. Assurant announced that their One Deductible (HSA) will only increase 8% to account for no annual limits and no cost sharing for preventative.

 

[medx]

Not sure about 40%. Assurant announced that their One Deductible (HSA) will only increase 8% to account for no annual limits and no cost sharing for preventative.

The Hurricane named "ObamaCare" has not even hit shore yet.....just wait.

 

[669comche]

It will be interesting to see what plans are available.

I like the idea of selling a non qualified plan to a healthy individual, depending on the size of the penalty. It may be workable.

Its CRAZY thinking that healthcare is mandated.

Some of the great things that this country was built upon are slowly being eroded. Before you know it it will be the CSA not the USA.

The Communist States of America!

 

[dgoldenz]

Not sure about 40%. Assurant announced that their One Deductible (HSA) will only increase 8% to account for no annual limits and no cost sharing for preventative.

That accounts those two, but what about GI for kids? What I want to see is how many companies will raise rates in October for people who bought policies between March and September, even though they have a 12-month rate guarantee.