- 3,352
I love this ClusterFkin thread...Holy shiat, gimme a navigator! I'm going to jump out a window trying to understanding this Obamination. Whew boys, settle down in here.
So What's Really Going to Happen to the Group Market
- Thread starter Crabcake Johnny
- Start date
- Staff
- #52
- 8,448
OK..so let's see if I'm understanding this correctly.. Starting in 2014, almost family that I have on the books who earns less than 400% of FPL will cancel the plan that they have with me and purchase an Exchange plan that will cost them less out-of-pocket in premiums (due to the subsidy)? Goodbye renewals?
I guess our only ray of hope is that the Supreme Court rules the Individual Mandate aspect of the Affordable Care Act as unconstitutional this Summer.
If they don't, then we can kiss Individual and Group sales good-bye come 2014?
-AC
- 10,275
Why do you think I have been telling everyone to GET OUT!
The longer you wait, the harder your fall will be.
The longer you wait, the harder your fall will be.
The low income worker will love the exchange, and that could make some group plans implode. No argument there.
Anyone nearing the top margin for subsidy (near 400%) will worry, because of the clawback and also because they may already have a group plan where their portion of the employee-only premium is less than 9.5% of their income. If ONE OF THE MARRIED PARTNERS in a family has such a group plan, the rest of the family doesn't qualify for the subsidy.
How this affects group plans depends on your region. In some states, no doubt the group market will suffer if not implode. However, Arizona for instance is a Mom & Pop state. A huge proportion of the businesses here have fewer than 20 employees, and the most common size of group is under 10 employees. Are all of those people poor? Certainly not. In Arizona, many small businesses initiate a group plan in the first place because the OWNER wants it for himself, his wife, his son, and his brother, all of whom work for the company (and all of whom are above 400% of the FPL or below 9% of income paid for premium). This isn't true of more than 50% of the states, but in many states that's the nature of the small group market. I have a group of Civil Enginners insured and the receptionist makes $56,000 and is married to an attorney. She's the lowest paid employee at the group, and even she won't qualify for the subsidy. My experience is that about 30% of the small businesses that I insure hire and insure low-paid employees, but about 70% of those businesses pay their employees a wage that would near the 400% level or be above it.
I don't know about the cost of living in other states, but in AZ a family earning a combined income (husband and wife) of more than $93,750 (400% of FPL using 2014 dollars or $88,000 in today's dollars) is just a normal middle-class family. And that is 400% of FPL for a FAMILY OF FOUR. There are a lot of empty-nester couples where both husband and wife work, and they earn more than 400% of FPL for a family of two. For instance, a single person earning more than $46,000 in 2014 dollars doesn't qualify for the subsidy, and married couples earning more than $63,000. Remember that you must pass the "under 400% of FPL" test first before you go on to "paying less than 9.5% of your income for premium" test. I don't know about the cost of living & wages in other states, but in AZ before the recession, most of my groups of carpenters, carpet layers, plumbers, and such couldn't pass both tests and get the subsidy. (The recession has changed that, and we're just now seeing a recovery.) I know the income levels because I also insure many of them for disability insurance for which they disclose their earnings. An awful lot of people won't qualify. The CBO estimates that 20 million American Households will qualify for the subsidy (not that they are very accurate!).
Let's also remember that there are other things that can kick you out. If you don't meet the 400% of FPL test, it doesn't matter if you're paying more than 9.5% for group coverage, you won't get a subsidy. If you earn less than 400% but your employer or spouse's employer pays most of the "employee-only" premium leaving you to pay less than 9.5% of your income for the employee-only portion, then your entire family doesn't qualify for the subsidy. If you earn less than 400% of FPL, you get a subsidy on a sliding scale that evaporates at 400%, so some people may not think their level of subsidy is worth it. For instance, if you make 380% of FPL, and you're single age 20, you get no subsidy because the premium is so low at age 20 that it's below your 9.5%. Change the age to 30, and there's still no subsidy. At age 40, there's $347 of a subsidy. At age 50, it's $2825 in subsidy. Those are all single people making 380% of FPL, and it's the 9.5% of premium rule that makes the difference. All of those things will factor in to whether or not a person gets, or accepts a subsidy to take an exchange plan, or if they take a group plan or IFP outside the exchange.
So, yes, it will make group plans implode. Sorta. In some states. In some groups. It will undoubtedly make agents dance. We'll have to keep quick on our toes, if this is implemented as currently written. For some of my groups, no doubt I would be pleased if the employer allowed me to visit with each employee and help them pick their exchange plan. In other groups, I have no doubt the employer will keep the private plan as long as possible. In many groups it will be a mixture of exchange, IFP outside exchange, and group. I just hope I can retain clients and pick up a volume of others. We'll need it.
Anyone nearing the top margin for subsidy (near 400%) will worry, because of the clawback and also because they may already have a group plan where their portion of the employee-only premium is less than 9.5% of their income. If ONE OF THE MARRIED PARTNERS in a family has such a group plan, the rest of the family doesn't qualify for the subsidy.
How this affects group plans depends on your region. In some states, no doubt the group market will suffer if not implode. However, Arizona for instance is a Mom & Pop state. A huge proportion of the businesses here have fewer than 20 employees, and the most common size of group is under 10 employees. Are all of those people poor? Certainly not. In Arizona, many small businesses initiate a group plan in the first place because the OWNER wants it for himself, his wife, his son, and his brother, all of whom work for the company (and all of whom are above 400% of the FPL or below 9% of income paid for premium). This isn't true of more than 50% of the states, but in many states that's the nature of the small group market. I have a group of Civil Enginners insured and the receptionist makes $56,000 and is married to an attorney. She's the lowest paid employee at the group, and even she won't qualify for the subsidy. My experience is that about 30% of the small businesses that I insure hire and insure low-paid employees, but about 70% of those businesses pay their employees a wage that would near the 400% level or be above it.
I don't know about the cost of living in other states, but in AZ a family earning a combined income (husband and wife) of more than $93,750 (400% of FPL using 2014 dollars or $88,000 in today's dollars) is just a normal middle-class family. And that is 400% of FPL for a FAMILY OF FOUR. There are a lot of empty-nester couples where both husband and wife work, and they earn more than 400% of FPL for a family of two. For instance, a single person earning more than $46,000 in 2014 dollars doesn't qualify for the subsidy, and married couples earning more than $63,000. Remember that you must pass the "under 400% of FPL" test first before you go on to "paying less than 9.5% of your income for premium" test. I don't know about the cost of living & wages in other states, but in AZ before the recession, most of my groups of carpenters, carpet layers, plumbers, and such couldn't pass both tests and get the subsidy. (The recession has changed that, and we're just now seeing a recovery.) I know the income levels because I also insure many of them for disability insurance for which they disclose their earnings. An awful lot of people won't qualify. The CBO estimates that 20 million American Households will qualify for the subsidy (not that they are very accurate!).
Let's also remember that there are other things that can kick you out. If you don't meet the 400% of FPL test, it doesn't matter if you're paying more than 9.5% for group coverage, you won't get a subsidy. If you earn less than 400% but your employer or spouse's employer pays most of the "employee-only" premium leaving you to pay less than 9.5% of your income for the employee-only portion, then your entire family doesn't qualify for the subsidy. If you earn less than 400% of FPL, you get a subsidy on a sliding scale that evaporates at 400%, so some people may not think their level of subsidy is worth it. For instance, if you make 380% of FPL, and you're single age 20, you get no subsidy because the premium is so low at age 20 that it's below your 9.5%. Change the age to 30, and there's still no subsidy. At age 40, there's $347 of a subsidy. At age 50, it's $2825 in subsidy. Those are all single people making 380% of FPL, and it's the 9.5% of premium rule that makes the difference. All of those things will factor in to whether or not a person gets, or accepts a subsidy to take an exchange plan, or if they take a group plan or IFP outside the exchange.
So, yes, it will make group plans implode. Sorta. In some states. In some groups. It will undoubtedly make agents dance. We'll have to keep quick on our toes, if this is implemented as currently written. For some of my groups, no doubt I would be pleased if the employer allowed me to visit with each employee and help them pick their exchange plan. In other groups, I have no doubt the employer will keep the private plan as long as possible. In many groups it will be a mixture of exchange, IFP outside exchange, and group. I just hope I can retain clients and pick up a volume of others. We'll need it.
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- 5,058
yall right wing psychos should listen to the health insurance Oracle "chumps from oxford"....he warned yalll, but u thought u were smarter!
RUN!!!!!!!!!!!!!!!!!!!!!!!!!1111
FOR THE DAMN HILLS!!!
RUN!!!!!!!!!!!!!!!!!!!!!!!!!1111
FOR THE DAMN HILLS!!!
- Thread starter
- #57
- 14,808
OK..so let's see if I'm understanding this correctly.. Starting in 2014, almost family that I have on the books who earns less than 400% of FPL will cancel the plan that they have with me and purchase an Exchange plan that will cost them less out-of-pocket in premiums (due to the subsidy)? Goodbye renewals?
I guess our only ray of hope is that the Supreme Court rules the Individual Mandate aspect of the Affordable Care Act as unconstitutional this Summer.
If they don't, then we can kiss Individual and Group sales good-bye come 2014?
-AC
Everyone one of our clients who qualifies for a subsidy will absolutely blow off our books.
If the Supreme Court upholds it, I'll start preparing myself financially. It'll be quite the income hit. Also, as Chumps constantly states, come 2014 selling health insurance will indeed be dead...as we know it. The entire game will change. Will their be comp for producers? Yes. Low? Yes. That turns it into a high volume game to stay alive. If you're currently selling small group, you'll be looking for another job too.
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- 3,352
John...Some veteran agents tell me that the reimbursement to agents wont be as low as you might think...more along the lines of medicare advantage reimbursement. What say you?
- Thread starter
- #59
- 14,808
I say that I've spoken with a few carrier execs about comp and they're all holding the line with "we don't have a clue."
PCIP pays $100 per life - write a family of 3 = $300. Let's use that as an example and if true, indie health would be an explosion.
Basically, that's along current comp - 10% with a $3,000 annual volume. Now imagine that with subsidies and GI?
The indie health market would be flooded....completely saturated with agents and call centers. There's no comparison in the insurance industry. Auto's by far not a GI product.
Now, if we change that to $100 flat per case regardless of the number of lives (like my MHIP) then only the strong will survive.
I see this being a flat fee instead of a percentage. Carriers will still have to compete and in fact the only real way carrier A will beat carrier B is by use of their agents. You really think UHC's gonna hang their hat on how many people "pick them" in the state exchange next to Blue Cross and Aetna? No way.
My next question is how does this impact carriers? Will everyone on the books with GR that has one of their crappy riders blow out? Why wouldn't they. "You mean, my asthma can now be covered? Later GR." So, do the carrier's books also implode? Will they all be sending letters out saying "stay with us in the exchange?"
Imagine every carrier sending a letter to their clients with the exchanges open: "Call us for your exchange plan!" Then you don't have to worry about losing your book - the carriers will pull the rug right out from under you.
PCIP pays $100 per life - write a family of 3 = $300. Let's use that as an example and if true, indie health would be an explosion.
Basically, that's along current comp - 10% with a $3,000 annual volume. Now imagine that with subsidies and GI?
The indie health market would be flooded....completely saturated with agents and call centers. There's no comparison in the insurance industry. Auto's by far not a GI product.
Now, if we change that to $100 flat per case regardless of the number of lives (like my MHIP) then only the strong will survive.
I see this being a flat fee instead of a percentage. Carriers will still have to compete and in fact the only real way carrier A will beat carrier B is by use of their agents. You really think UHC's gonna hang their hat on how many people "pick them" in the state exchange next to Blue Cross and Aetna? No way.
My next question is how does this impact carriers? Will everyone on the books with GR that has one of their crappy riders blow out? Why wouldn't they. "You mean, my asthma can now be covered? Later GR." So, do the carrier's books also implode? Will they all be sending letters out saying "stay with us in the exchange?"
Imagine every carrier sending a letter to their clients with the exchanges open: "Call us for your exchange plan!" Then you don't have to worry about losing your book - the carriers will pull the rug right out from under you.
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