Selling ACA - why / why not?

[Alston]

There are a lot of reasons not to sell individual health.

The biggest one is:

They may not pay us next year.

Until and unless, I feel confident that individual health is likely to pay us 10 years from now, I'm focusing elsewhere.

How do you calculate LTV (lifetime value) of a client if you don't know if you'll ever get a renewal commission from their policy?

I used to be one of the top 10 or 20 agents in Connecticut for ACA, so it pained me to move away from it.

I had a ton of knowledge that I worked hard to acquire and was forced to learn something new. They didn't pay Connecticut agents for 2017.

But that might have been the best thing that happened to me in a while.

(I was pretty convinced that we were safe until at least 2018. The new president couldn't make changes that took effect in his or her inaugural year. He didn't. But I got blindsided by a state-level change. "The kick that knocks you out is the one you didn't see coming" according to my Kyoshi.)

They reinstated commissions for 2018 at 2/3 what it used to be. It's back to about 90% for 2019 but once burned...

Plus Medicare is more profitable. Higher commissions (in my state), less service work, more referrals and greater persistency. That translates into a greater LTV and more time with my family, in the pool, in the dojo and in the gym.

You gotta think long term! Think LTV not FYC!

It will take me three years to make the transition from supporting my lifestyle with my health insurance renewals to being able to do the same thing with my renewals from other lines. (One year to go.)

2019 will be the last year I'll need any ACA income. I still help my existing clients. I still write a few referrals. But I don't spend a dime marketing it and say "no" to new business that wasn't referred.

I want a stable business. I want a predictable base revenue.

If you're going to gamble, gamble on something that has a big potential payoff. Go for big life insurance sales, for example.

Why gamble on something that pays moderately if you win and pays nothing if you lose?

Nothing's guaranteed, but until things stabilize, individual health is not the foundation to build a business on.

 

[myinsurebiz]

Good luck to you . . .

There are a lot of reasons not to sell individual health.

The biggest one is:

They may not pay us next year.

Until and unless, I feel confident that individual health is likely to pay us 10 years from now, I'm focusing elsewhere.

How do you calculate LTV (lifetime value) of a client if you don't know if you'll ever get a renewal commission from their policy?

I used to be one of the top 10 or 20 agents in Connecticut for ACA, so it pained me to move away from it.

I had a ton of knowledge that I worked hard to acquire and was forced to learn something new. They didn't pay Connecticut agents for 2017.

But that might have been the best thing that happened to me in a while.

(I was pretty convinced that we were safe until at least 2018. The new president couldn't make changes that took effect in his or her inaugural year. He didn't. But I got blindsided by a state-level change. "The kick that knocks you out is the one you didn't see coming" according to my Kyoshi.)

They reinstated commissions for 2018 at 2/3 what it used to be. It's back to about 90% for 2019 but once burned...

Plus Medicare is more profitable. Higher commissions (in my state), less service work, more referrals and greater persistency. That translates into a greater LTV and more time with my family, in the pool, in the dojo and in the gym.

You gotta think long term! Think LTV not FYC!

It will take me three years to make the transition from supporting my lifestyle with my health insurance renewals to being able to do the same thing with my renewals from other lines. (One year to go.)

2019 will be the last year I'll need any ACA income. I still help my existing clients. I still write a few referrals. But I don't spend a dime marketing it and say "no" to new business that wasn't referred.

I want a stable business. I want a predictable base revenue.

If you're going to gamble, gamble on something that has a big potential payoff. Go for big life insurance sales, for example.

Why gamble on something that pays moderately if you win and pays nothing if you lose?

Nothing's guaranteed, but until things stabilize, individual health is not the foundation to build a business on.

 

[Alston]

Good luck to you . . .

Thanks, but you're making me wonder if I expressed myself well.

I'm back. I'm "out of harms way." I just can't live off my non-ACA renewals yet. I used to be at a point where I could maintain my lifestyle without FYC and I'm almost back to that point.

I may have been too autobiographical, but I tried to stay in first person partly because you asked "what are your reasons..."

My main point is, I choose to invest in lines of insurance that are likely to be commissionable for the long term.

It's nice to have a goose that lays golden eggs until gold loses its value.

And it's not just the renewals you could lose.

You're honing a skillset and creating systems that will be worth less (two words - some of it will be transferable) if agents can't make money from individual health products.

It might not make sense for you to switch from individual health to something else in the near term.

However, I strongly suggest you hedge your bet.

Get to the point, if you're not there already, where you're earning 10% to 20% of your income from another more stable line of insurance.

You should be able to sell the other line(s) to "cold traffic," not just to your existing clients and referrals.

It is a whole lot easier to 10x or 5x that income than to start from zero. Especially if you lose your individual health income without much warning.

I earned 10% or so of my income from Medicare when the hit the fan.

The swim back to shore was long and dangerous, but I knew how to swim before I fell off the boat.

 

[Chazm]

I was just comparing the time / effort to do an ACA case vs a MA / MAPD. Only talking about <64 peeps not eligible for Medicare.

ACA takes less than 30 - 45 minutes via HealthSherpa. No Health issues to worry about. No underwriting . . .

The pay is better than MA / MAPD with 2 or more members in the house. Even just one Member is $180 a year - not bad for 30 - 45 minutes of work.

I'm doing Individual / Small Business Term & Ancillary products. Makes sense to have ACA and STM products too.

I'm actually enjoying what I do for the first time in 10 years. No Medicare, No FE, No Traveling, No lead cost, No weekends, No downlines, etc . . .

MAPD takes me 10-15 min per to do an app. Husband and wife T65 for 1/1/19 is $484x2=$968. No underwring. No pre ex.
Not saying one is better than the other but it makes zero sense to stop MAPD and med supps

 

[russelltw]

There are always pros and cons.

With ACA here are some issues you have to deal with:

• Client calls the marketplace to make an address change (any change for that matter), the marketplace rep removes you as agent, you lose client and comp.
• Have a major carrier leave the market? CMS will approach the remaining carrier and offer to roll the existing carrier's book to the new carrier. Happened here, remaining carrier at least paid us renewal rates, but from what I was told CMS said it was up to the carrier if they wanted to pay anything at all. Also lost a number of clients because my NPN didn't transfer from marketplace to renewing carrier. I know several agencies who thought they were going to make a killing rolling their books to the new carrier...didn't happen. Other agencies were not contracted with the remaining carrier and lost it all.
• With ACA, you may have to provide proof of income or some other required docs. Client never sends them and you lose the client.
• Comp will continue to come down. My major carrier remained the same for 2019, but made it known that changes were coming for 2020...broad sweeping changes.

In Oct 2013, a company exec told me to work on my plan B and plan C. This ACA will not be as lucrative as it is now.

After the first AEP, I told my agents to pay off debt with this new ACA income and not to think this would continue forever. I have learned the ACA market can change suddenly, so act/plan accordingly.

 

[Yagents]

The bottom of ACA has been hit, on uptrend. Commissions up 80-100% in some states. Going from $10-12 pmpm to $18-20 pmpm.

Everyone else stay out of ACA

 

[somarco]

Alston, took me a little over 4 years to replace lost U65 (pre-Obamacare) revenue. Now 8 years in and never looked back. Wish I had made the transition to Medicare years ago.

Rusty, you speak the truth. There are pockets where an agent can make $$ selling Obamacare, but what do you do the other 9 months? I know some agents are pushing STM but I never promoted those plans pre-2014 and don't see a reason to start.

Long timers have found a new niche or left the business. A pro will always land on their feet.

 

[Yagents]

Obama made STM into an alternative to consider. Rarely sold one in 10 yrs prior to ACA. 70% of yearly income will be made in 60 days. Med supps for rest of year.

 

[myinsurebiz]

Alston, took me a little over 4 years to replace lost U65 (pre-Obamacare) revenue. Now 8 years in and never looked back. Wish I had made the transition to Medicare years ago.

Rusty, you speak the truth. There are pockets where an agent can make $$ selling Obamacare, but what do you do the other 9 months? I know some agents are pushing STM but I never promoted those plans pre-2014 and don't see a reason to start.

Long timers have found a new niche or left the business. A pro will always land on their feet.

There are plenty of life events that qualify peeps for ACA outside of AEP. Just have to target them . . .

Like I mentioned earlier - this is something that I'll use to add on to clients Term,, Worksite, etc . . .

$20 a month is more than MA / MAPD and less hassle and no cat piss or travel . . .

In addition - in Georgia and a few other States, for a small license fee and a simple test, an Agent can charge a "consulting fee" as a Counselor - this will certainly help . . .

But - thanks to some Forum Members - I will be trending into Med Supps in 2019 for the pipeline biz . . .

 

[myinsurebiz]

Obama made STM into an alternative to consider. Rarely sold one in 10 yrs prior to ACA. 70% of yearly income will be made in 60 days. Med supps for rest of year.

I actually liked your advice on putting < 64 peeps into an ACA plan then set up the cross sell with a Gap Plan, Accident, Dental, Vision, etc . . .

I quoted a lady today a STM plan just to get her family by until their ACA plan's 1/1 effective. $1100 premium @ 23% commission for 2 months - an easy $506 commission.