How Does the Romney's Mass Health Plan Pay Brokers?

[Winter_123]

2.5% comp is doable, but you have to have a lot of groups you're working with to make a good living. That's easier when a lot of people won't mess around with it.

For groups of 50+, are they expected to go out on their own? Is that where a broker market exists?

When you look at what is going on in other states, you not only have to look at what is legally allowable but also how it plays out in practice.

In some states, Maine for example, you may be able to look at some info online that says that commission is available to independent agents for individual and group sales. And while that may be true, that business is dead and has been for years. Anthem has most of the market but they are only doing individual and group sale through their captive agents these days. (their rules change a little from year to year depending on areas where they may have a need). There is a little aetna business left for agents but that is mostly just a service to clients who the agent has a relationship with and they may be using just captives now. I dont know. As I said, there are little or no independent health agents left to bother to have the discussion with.

I did leave out Mega and yes, there are some independent agents doing that, if that sounds good to you. Groannnn.... As I said, the independent health agent role is pretty much gone except for those bits and pieces I mentioned. Some agents still have groups left over from when Anthem shut out non-captive agents and so on. So there are some exceptions to what I said if one ones to get persnickity.

My point is, be careful about just looking at what is "legally still allowable" in some states and assuming how it works there. Never forget that as the carriers get squeezed they are going to squeeze the independents first. Not only by squeezing them out completely but by running direct ads and direct web sign up programs as in Maine.

Yes, we can replay the same old, same old discussions about how if all the carriers go direct to the consumers or direct to the exchanges that there will still be some business left over for independent agents and then people here will re-play the old say about how everyone thought independent auto insurance agents would go away when progressive and geico came along blah, blah, blah.

I am just saying that in the states such as Maine and Mass that are further along in this type of thing, the role of independents has long been dead. If it is going to be different for you then fine. You know sometimes Obama and independent agents both think alike. Obama sees how guaranteed issue and state run programs ruined the marktet in Maine but says "it will be different for me at the fed level even though it didnt work for them. I dont know why but it will be." Independent agents often look at the experience of Maine and Mass and say "yeh but it will be different in my state. Do you all remember back when they said auto agents would be this or that if this or that happened." And so on.

It is not just a matter of whether commissions are legally allowed. It is also a matter of whether there are any carriers left that want independent agents. And of most importance is the issue of whether there is any traffic coming your way as a result of exchanges and carriers doing direct sales. If you are legally allowed a commission but no one wants and independent agent and if they do, 95% of sales are now going through direct sales to carriers or roundabout through exchanges then that is not a pretty picture.

My point again, is just be careful about researching what is technically allowable in some states and then assuming that you would still be able to business in an x,y, and z manner and make x,yz dollars. That is only theory but in reality the whole landscape shifts against you.

Since it looks like Obamacare is going to bite the dust, in part anyway, it looks like a lot of the old theories and discussions are resurfacing. That would make sense because we have basically been suspended in time for years now. One of the common arguments that people used to make here was: "Hey, I can live with a lower commission if it is guaranteed issue. Sure the commission is less but I will just drive around signing people up all day and nigh and not have to worry about underwriting."

Oh boy. Not going to say anything about that. Have already said my thing on that years ago. Good luck with that. I have even often heard that theory spun in a way that would indicate that some agents are going to get very, very rich when guaranteed issue kicks in. "Oh boy" times two.

Norwayguy here on the forum is from Maine too and knows a bit more about some of this, and I know a bit about some other parts so he might have some things to say to revise my words a bit. Basically we have to compare notes because that part of the industry is dead and there are no independents left to chat with about it.

 

[Ann H]

Clearly, any reform that eliminates competition down to 1 or 2 carriers is bad for the broker. This has been true whether it was caused by GI or not. In NY, ME, MA, VT etc., healthcare reform and GI caused it. In MT and NM for instance, a lack of carrier participation caused it. Anytime 1 or 2 carriers "own" the state, independent agents wither.

So, if we want to make a living, we need to keep focused on the issues that kill our careers vs just modify it. Health care reform isn't going away. States have been enacting reform for years. If PPACA is struck down, health care reform will emerge on a national level with all ideas on the table again - single payer, state solutions instead of federal, exchanges, co-ops, etc. Modifying our careers is possible, killing our careers is another issue.

Clearly single payer isn't in our best interest. However, GI alone isn't necessarily our enemy. Medicare supps are GI and there's a market for brokers. A few years ago, Group health insurance became GI nationally, and brokers thrive. In AZ we went from about 50 carriers to about 10 (now it's about 6), but in states that went down to 1 or 2 carriers (like MT or NM for instance) there is no competition and no need for independent agents. GI isn't really our problem, and exchanges aren't really our problem. Keeping a robust competitive market with many carriers and the ability to earn commission inside and outside of any exchange is key. We need to keep our eye on the ball and not be distracted from issues that will modify rather than terminate our careers. We'll have to do this on the federal and state level, because it's possible that Congress may bat this to the states for their own solutions, and it's probable that many states will work on their own reforms rather than wait for congress anyway. Agents in liberal states can expect far worse than those in conservative states.

 

[Winter_123]

Clearly, any reform that eliminates competition down to 1 or 2 carriers is bad for the broker. This has been true whether it was caused by GI or not. In NY, ME, MA, VT etc., healthcare reform and GI caused it. In MT and NM for instance, a lack of carrier participation caused it. Anytime 1 or 2 carriers "own" the state, independent agents wither.

.

Once a state or the feds start down that road it becomes a process that feeds upon itself to justify the next step toward government intervention.

Example. In Maine, we had lots of carriers. Then the state took steps to "improve" the system which drove all the competition out so that it landscape was dominated by one (two would look good in some places) carrier. Then the libs say " we need more involvement because we left this thing to the free market and prices went up and it is just one or two bad boy carriers that control the whole thing now and they screw the consumer." And of course the result of state intervention was that rates went through the roof and beyond Pluto. Which of course becomes the rallying cry for why more intervention is needed. Coming to a neighborhood near you soon unless you stop it.

When I participated in this subforum more a couple years ago, I used to give one one message that I will repeat again and then sort of step back in to the vapor a little because I have said much of what I would say on these topics but that message is important and it is this:

I said that once Obama and company get better at this socialist game they will find out they really dont want to take over the health care system with all of the problems, costs, and things you get blamed for. Instead, as they learn the game better, they will begin to play the game of "hey, let's let the private sector run the whole thing and we will just regulate the shiite out of it and keep adding on any requirement we want. That way we get to see all the features we want, but the system is not a line item in the federal budget, and as costs keep going up, well, people wanted the private sector to handle it and there it is."

We have officially entered that phase. Expect Obama to suddenly become all in favor of the states running it too. And, oh by the way, even if the court shoots down the mandate and obamacare in total, it has not ruled that the feds do not have the authority to mess with insurance requirements through the interstate commerce clause.

Of course I am just stating what the Obama types want and what the next phase is. If they dont do well in the elections (and by that I definitely mean the house and senate as well), then they may or may not get what they want. But that is what the next step is if unchecked.

Let's see now. We were talking about adding contraceptives last month.......and next month it will be......

 

[Ann H]

Once a state or the feds start down that road it becomes a process that feeds upon itself to justify the next step toward government intervention.........

Let's see now. We were talking about adding contraceptives last month.......and next month it will be......

Agreed. Sometimes you can stop a train, and sometimes you just need to let one wreck as an example.
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Wow, this explains why the premiums in MA have dropped so much over the last few years!!!!!

Premiums dropped because the DOI and AG's office put the carriers and providers in a room, locked the door and said "don't come out until you figure it out."

They did.

When did premiums drop in Massachusetts? Their premiums are the highest in the nation. On the fifth anniversay of MA healthcare reform in April 2011, the following was reported:

The law, however, has failed to curb rising costs. While implementation of the law itself didn't put a major dent in the state's budget – according to an analysis by independent group Massachusetts Taxpayer Foundation, the increase in net spending for the law was just 1 percent in fiscal year 2010 – it hasn't reduced overall costs for policy holders.

Private spending per member grew by 15.5 percent on average between 2006 and 2008. Meanwhile, average premiums for full insurance increased 12.2 percent from 2006 to 2008, according to the Massachusetts Division of Health Care Finance and Policy.

Proponents of the law argue that it was mainly designed to expand coverage, not tackle health care costs. Much of the growth in premiums, per the DHCFP, was caused by an increase in medical expenses. More than 88 percent of premiums in Massachusetts are spent on medical expenses.

But opponents point to the shift in cost burden from employers to individuals as a sign of the law's weakness. The median health insurance premium for a policy holder in Massachusetts was $442 in 2009, a 21 percent jump from 2005. Meanwhile, employers' share of premiums fell in the same time period.

Bankruptcy filings due to medical costs have also jumped, increasing by more than one-third between 2007 and 2009, according to analysis published in The American Journal of Medicine in March.
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Has Mitt Romney’s Massachusetts Health Care Law Worked? - ABC News

I think what you're referring to is the recent refusal by MA to allow insurer's highest rate increases. Not allowing some rate increases, and premium decreases are two different things.

 

[Crabcake Johnny]

Cheapest rate for my family in MA (44m, 49f, 10m) would be $1,025. I would not qualify for the subsidy nor would I pay that amount.

btw; that's a $2,000 ded. $5,000 OOP so an event would cost me $19,300.

 

[stuy119]

Cheapest rate for my family in MA (44m, 49f, 10m) would be $1,025. I would not qualify for the subsidy nor would I pay that amount.

btw; that's a $2,000 ded. $5,000 OOP so an event would cost me $19,300.

It's much less expensive to pay a fine/tax and then cover your bankruptcy costs.

 

[Crabcake Johnny]

Everyone's situation is different. I'd move. I work online. So if MD implemented exactly what MA did and I was forced to pay $1,000+ premiums, we'd just pack up.

 

[shepnerd]

Cheapest rate for my family in MA (44m, 49f, 10m) would be $1,025. I would not qualify for the subsidy nor would I pay that amount.

btw; that's a $2,000 ded. $5,000 OOP so an event would cost me $19,300.

$475 here for that plan, with copays.

When I worked in a call center I'd get calls from New York and it was fun to tell them what their plan would cost here. They really have no idea what us dumb folks down here in the red states pay and dont understand why, even when you try to explain why to them.

Winter, you are dead on on this stuff, my thoughts exactly. They've taken the free market out of the picture, then blamed it for not working. Not all our governments fault, though. Big Pharma, hospitals, and many others have done well separating the consumer from the cost on this stuff.