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I don't think we'll see a percentage. I think it'll be more like MA plans and we'll receive a fee per app.
Reality Emerging
- Thread starter Winter_123
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I don't think we'll see a percentage. I think it'll be more like MA plans and we'll receive a fee per app.
More than that.
I have been around enough actuary's over the years to know that 30% is way low. A high percentage of those "locked out" are uninsurable. Many times they have options, such as a risk pool, but choose to go uninsured.
A better option would be to make them Medicare eligible. Currently you can get Medicare after 2 yrs on SSDI.
It makes no sense to put these people in the general population and force up the rates on everyone. In many cases the premium will still be unaffordable, so why not put them in Medicare?
More proof of how ignorant the folks in Obamington are.
- Thread starter
- #13
- 2,908
Depends on whether the Obama has a public option or some other preferred option that he is promoting. If they honestly think that agent commissions drive premiums up then they might just leave it alone as part of their move to make their brand X plan look more affordable. Don't know. No one in the obama adminstration has any business experience so it is hard to know what they see as incentives and disincentives.
I dont think public option is going to fly but my point would be the same. They will always have some other option that they are trying to get folks to migrate over to. In other words, Obama is not interested in driving premiums down. He is interested in driving them up for everything except his preferred strategy, whatever that may prove to be. How that plays out with commissions remains to be seen.
Also, in regard to your comparison with MA's, it is also likely, that (as with MA's) things could be okay or even lucrative the first year or two and then get progressively more grim as both the carriers and the feds develop their exhanges, websites, whatever to take agents out of the equation.
I don't doubt for a minute that one year into the reform implementation some agents will pipe up and say "gee, we were all supposed to be eliminated but here I am happy as a clam at high tide making money." Quite possible, but as with MA's, every year will be a new tightening of the vise.
On the other hand, some agents will truly learn to profit from the new system so that must be recognized as well. They will be smart and nimble though. No gravy train or gold rush involved after the first year or two of the reform. GI is coming but I have never said that that means that the sky is falling- only that it is a major, major gamechanger.
I am planning on making a few bucks when it happens but then again I am in state where you can only go up.
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In the no public option but guaranteed issue option that is starting to look like a real possibility will also include a cap on admin fees (totally my guess), which in turn will limit what can be paid in commission. I would guess that insurance companies will be forced to pay 85% of what they collect in premiums out in claims, leaving only 15% for overhead, which includes us.
To make this work, reserves will be almost impossible to manage. Agents will either be given a placement fee or will have to start actually servicing the clients. Agents providing more client service may be beneficial to both the agent and the carrier, but flies in the face of several other laws (but then, so does nationalization of health insurance, so hey....) The somewhat downside of this is it will lead to either health insurance being sold by larger brokers who can have staff OR more likely, being sold by 'employees' of the carriers.
We'll see.
Dan
To make this work, reserves will be almost impossible to manage. Agents will either be given a placement fee or will have to start actually servicing the clients. Agents providing more client service may be beneficial to both the agent and the carrier, but flies in the face of several other laws (but then, so does nationalization of health insurance, so hey....) The somewhat downside of this is it will lead to either health insurance being sold by larger brokers who can have staff OR more likely, being sold by 'employees' of the carriers.
We'll see.
Dan
That is close to what most major med carriers do already, in spite of what the public and the folks in Obamington think. Reserves, mandated by law, are just future claims not yet paid.
If Congress thinks they can require a carrier to have a PAID loss ratio of 85% they will have no takers. Depending on the line of coverage, reserves are in the 15% range. PLR would be around 70% then add in IBNR reserves and you are around 85%. Figure admin and premium taxes you might have enough left for 2 - 4% profit.
Carriers with a large enough block can keep their admin to less than 10%.
Carriers and govt employees have no desire (or ability) to staff up for 24/7 selling. If DTC selling worked so well none of us would be doing this now.
Geico makes it work but if it worked that well why don't all the other auto carriers follow suit?
The empty suits in Obamington and the hallowed halls of the carriers don't have a freakin clue how things work.
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The current bill states that insurance companies can only make a certain % of the premiums and have to give the rest back to the insured.
The Gov. cannot dictate profit to companies. If they do there will not be any competition left and the premiums go way up.
As far as our commission on a GI plan.
I think it could be incentive driven but starting at a much lower % like 5% on the first 15 policies.
There will be huge opportunity with the regional carriers because they will give much bigger commission to get the business. This is just a guess.
The Gov. cannot dictate profit to companies. If they do there will not be any competition left and the premiums go way up.
As far as our commission on a GI plan.
I think it could be incentive driven but starting at a much lower % like 5% on the first 15 policies.
There will be huge opportunity with the regional carriers because they will give much bigger commission to get the business. This is just a guess.
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This already regulated at the state insurance department level - there is absolutely no need for the federal government to get involved!
They already do (profit), and they already have (premiums)!
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The current bill goes much deeper than that.
It states that if a certain amount of the premium is not used in claims then a % of that premium goes back to the insured.
The bill is trying to address loss ratios and how the insured should get back any un used portion.
It states that if a certain amount of the premium is not used in claims then a % of that premium goes back to the insured.
The bill is trying to address loss ratios and how the insured should get back any un used portion.
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Duh - isn't this the whole point? To get all Americans healthcare.
Had a young lady - 24 y/o - no insurance - last week diagnosed with endometriosis. Her cost for services will be over $15k.
Healthcare for those that are above medicaid but not enough to afford premium - deserve coverage.
Go Obama . . .
True that . . .
Either way - as long as they pay - healthcare for those that can only afford a little will be a HUGE seller.
I can't wait.
Go Obama . . .
Tom
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This already being done!
