Optimism for Individual Health Insurance Agents

[jmilber]

Hey all,

I am an agent who basically exclusively sells individual health insurance in CA. My mother also does the same, and we completely rely on the commissions to live. This health reform bill that passed is like a nightmare that never ends... We are terrified we will lose everything we worked so hard for, and feel like NO ONE is representing us. Group agents are represented at a minimal, but from what I see people can care two craps about individual health insurange agents.

Anyway... as promised, lets talk about optimism.

"OK--- they wont let me post URLS since I am too 'new' so follow instructions.

www dot politico dot com / news / stories / 0710 / 40234 dot html

no spaces of course. Sorry for the weirdness there.

It looks like we do have some allies who are fighting for us... Read the article above. Its interesting.

Also--- whats the possibility that Obama loses the election and/or Republicans take over the house? The legislation still has lots of fine tweaking and further legislation to modify it as it is implemented. Lets hope the Republicans are the ones who get the final say in how these "tweakngs" go because they are on our side the most. A full repeal of this legislation would be a godsend, but lets face it - it's a long shot.

Brokers still might have a use despite the exchanges. The Health Reform has been confusing for people and I think insurance carriers will still want agents representing their products, because the carriers with agent reps will inevitably enroll the most people, and for guaranteed issue insurance to work they will need to enroll massive amounts of people to make the risk pool. I suspect only the top 2-3 carriers in each state will stay in business and the rest will fail. Insurance will always be confusing to people, and agents can help explain it, enroll people, and advise them.

Lastly... this "Grand Fathering" concept. I suspect the new plans will be so expensive, that my current book of business will stay on their "Grand-Fathered" plans. Perhaps I can salvage a formidable portion of my current book of business. What do you guys think? A possibility?

What do you guys think are the key "saving graces" for us as IFP health insurance agents. I know there is a possibility we are not 100% doomed, right?

 

[moonlightandmargaritas]

"The National Association of Insurance Commissioners chose not to allow agents' sales commissions to count as "medical care" under insurance industry guidelines being drafted to implement the landmark health reform law."

Health reform puts health insurance agents in the crosshairs

 

[Dave020]

From today's NAHU newsletter........

The Hill (8/19, Pecquet) reports in its Healthwatch blog, "The industry group representing insurance agents and brokers told The Hill they're thankful to state regulators for acknowledging agents' role in healthcare, and are on the verge of gaining similar support in the Senate." John Greene, vice-president of congressional affairs for the National Association of Health Underwriters (NAHU), said, "We were very happy that NAIC acknowledges the positive role that agents play in the market." NAHU "has been pressing" HHS "to acknowledge agents' role in the agency's new insurance Web portal, called for in the healthcare reform law. The agents also want HHS to limit the role of 'navigators' in the future state health insurance exchanges; these are people, charged with educating the public about health insurance options, who aren't trained and licensed as agents and brokers are."

The Palm Beach Post (FL) (8/19, Singer) reports, "As the Affordable Care Act is implemented, it's going to require that more healthcare spending goes to actual healthcare, rather than insurance underwriting, administration or big salaries, Health and Human Services Secretary Kathleen Sebelius said this week, highlighting the fact that next year, insurance companies will have to send rebates back to consumers if they overcharge." As a result, "one of the biggest losers in the transition may be insurance agents, the people who help individuals and small businesses select health insurance plans," and "some observers question whether the profession will survive the change." Notably, during its meeting earlier this week, "the National Association of Insurance Commissioners urged federal policymakers to make sure that licensed health insurance agents have a secure future."

 

[CHUMPS FROM OXFORD]

Click on this very interesting link or a spammer will cut your liver out.

And yes...you will see broker and agent commissions in there!

http://www.naic.org/documents/index_health_reform_mlr_blanks_proposal.pdf

 

[nolaagent]

Click on this very interesting link or a spammer will cut your liver out.

And yes...you will see broker and agent commissions in there!

http://www.naic.org/documents/index_health_reform_mlr_blanks_proposal.pdf

The "agent commissions" line is in there, but I don't see anything that would lead me to believe that it will be allowed in the MLR calculation.

 

[CHUMPS FROM OXFORD]

Nor do I. But no final decision yet unless I missed it.

 

[AllenChicago]

Page two of the NAIC "blank" (http://www.naic.org/documents/index_health_reform_mlr_blanks_proposal.pdf ) is pretty clear that Agent/Broker Commissions are included in the General Administrative Expenses. Every one of the 9 health insurance companies we work with will be cutting commissions. Yesterday's summary from the big NAIC meeting only served to confirm what the health insurers felt was going to happen. After all, it's quite a stretch to say that our commission is an expense that keeps insurance clients well, or treats them when they're sick or injured.

An insurance company VP of Marketing came to our brokerage today to confirm that Agent Commission will be counted at Administrative Expenses by HHS. Therefore, we would have a pay cut, but he assured us that his company will not have to cut our commission by more than 5%, effective 1/1/2011. Their MLR is now at 88% in Illinois, so even with the mandatory benefit improvements being mandated into every individual policy, only modest cutbacks in various area of the company will be necessary. He said many of the lowest priced and/or inefficient carriers are gearing up to make BIG TIME commission cuts and to slash salaries/benefits at the Home Office level too.
AC

 

[TXINSURANCE]

Their MLR is now at 88% in Illinois

Checking my MLR chart... Got it! LOL...

 

[jbage007]

I'm not sure where all of you guys are getting this newfound optimism from.

As far as I can tell, the best thing that will happen is that the vast majority of agents will leave the business. If commissions are good enough, that could be very good for those left behind.

But these governmental "exchanges" are going to be a MAJOR hindrance.

 

[jmilber]

We are not optimistic that there won't be pay cuts... I think we are all certain that we will have to make some sacrifices here. The only thing I am hoping for is that my profession will survive. I am 25 and worked up $75,000/year of residual income which supports me entirely-- 95% individual and family plans. I am praying that that commission cuts will not be so extreme it puts me out of business. I put my heart and soul into building my business; I thought I was set for life until this assclown Obama straight ruined my life. I've never believed a president could literally put me out of business like this....

In CA, we do 20% first year and 10% renewals. I would be EXTATIC to hear that my business will survive, but comissions will be 5-7% from now on. I coudl handle losing my juicy first year commision, and I can handle losing 30% of my residual if it means I get to stay in business otherwise and hold on to a residual comission stream of some formidable sort. If it means premiums will be rising and there will be less agents in the market and more people needing insurnance I can survive. If it becomes a one time flat fee of $100 per referral who stays for 3 months, or something lame like that, we can all kiss the health insurance profession goodbye.

Flat Fee might not be the end of the world if it is a residual flat fee...
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Im not a pro at this legislation, but it sounds to me like a lot of deciding factors of our insurance livelihood is dependent on decisions made on a state level, right?

I hear some of you talking about drastic announcements being made in your state, but here in CA everything is business as usual and there has been no talk of pay cuts at this point.

I dont see what the hell the point of this stupid 80% required medical spending is... If the government just left it alone, carriers would compete for the lowest rates as it is. Now there will be pressure for these companies to run their businesses as cheaply as possible and everyone will suffer through poor customer service, claims, and they wont have trusted agents to advocate for them possibly. Inevitably, only the largest companies will prevail because they will all offer the exact same products, and the cheapest rates will come from those with the greatest economies of scale. Carriers will try to maximize their profits but cutting everything down--- this is real socialism here to have the government strangle the free market health system. Oh well, just venting I guess =-\