Sunset for Individual Plans Written After PPACA

[AllenChicago]

I clearly remember an April 2009 seminar where Senior Management at the 3rd largest health insurer emphatically stated that the Patient Protection Affordable Care Act would not pass. The top guy said that "The People" didn't want it and Congress was therefore obligated not to pass it... or words to that effect.

Maybe these Execs aren't as bright as many agents think they are. After all, Kathleen Sebilius and Prez Obama verbally insults the health insurers, while firing shots at their feet, like in the old western movies. And due to MLR, they can't even conduct business like all other American companies have the freedom to do. Yet they complain not? Maybe I'm just old fashioned in believing that freedom is more precious than a MLR-restricted profit.
-AC

 

[somarco]

Carriers rolled over on all this and I still haven't figured out why. All they need do is look at the few states with GI and community rating and it doesn't take a rocket surgeon to figure out there is only room for maybe 2 carriers in that deal. Reality is, one carrier with 80%+ market share and a 2nd carrier with the balance.

The feds don't even have authority to dictate contract language, benefit levels, rates and loss ratio's.

Not only did the carriers roll but so did the DOI in each state.

 

[AllenChicago]

There will probably be a lot of agents suckered by HHS into "facilitating" the purchase of Exchange plans. HHS (or a given state) will promise a fee for facilitating and some smaller amount for renewals. But the mental and personal toll to the agent/faciliator will be high... Certifying and always under Uncle Sam's watchful eye. Just one complaint e-mail from a customer to HHS will get you fired, with no further compensation.

Like you see here: USAJOBS - Search Jobs a government "facilitator" job requires you to sell your soul to them without any reciprocal guarantees, security,...nothing.

The way HHS dislikes and disrespects agents, our requirements will (likely) be even more strict, overbearing and intrusive.

-AC

 

[Ann H]

I think carriers were short-sighted in approving of PPACA, but what's not to love?

Although insures can only have 20% for administration or profit, 20% of a huge number is a lot more money than 20% of today's premiums. And rates WILL increase:

Rates will increase 40-60% based on GI alone

Rates will increase because of minimum benefit standards, including maternity, mental health, more, more

Rates will increase because of standard plan designs where the lowest cost Bronze plan is far richer than the average American's current plan, and incredibly richer than those who select an HSA or high deductible plan.

Rates will increase because nothing in PPACA drives down the already spiraling medical costs.

Rates will increase because the high-benefit plan designs will motivate consumers to over-utilize (especially when the govt is footing the subsidized premium anyway).

​

Everyone must buy insurance or pay a penalty/tax

Lower income individuals get money from the govt to buy insurance, which means reliable premium payment and cash-flow

Those lower income individuals are currently not on the books, so it's an influx of new business

Younger people are often uninsured, so that's an influx of new and also low-risk business

Three years from now when it all implodes, national health care will take over and the govt will ask these insurance companies to administer the benefits and claims anyway

They pay us lower commissions

They will fire us in 3 years anyway

Win-win-win!

 

[somarco]

20% of a huge number is a lot more money than 20% of today's premiums.

Yes, but do think commissions will increase in proportion to the premium increases?

No, they won't.

Carriers have fixed costs and variable costs. Fixed costs may change in negligible amounts, but the variable costs will also increase.

Just because the premium block increases from (pick a figure) $10 million to $16 million doesn't mean a windfall to the carriers.

Underwriting costs will decrease, some, but claim costs will increase substantially.

More claims.

More small claims.

More large claims.

More total claims.

More govt red tape, reporting, rebate calculations, etc.

No windfall.

 

[Ann H]

My post was tongue-in-cheek, Bob.

I agree with you that commissions won't rise, and won't be paid as a percentage of a spiking premium. In the last few lines of my post I said they pay us lower commissions, and will fire us anyway if national health care takes over. I also agree that carriers were short-sighted in approving of PPACA. All I've read in the media about carrier's response is that they thought the volume of new business would be worth it, and there was a lot to love about the deal. I wonder what they are thinking now, and what they will be thinking in a few years. In GI states, usually only 1 or 2 carriers stand, and the rest sell-out to them or pull out of the market. I think carriers took this hook, line & sinker.

 

[nordicnacho]

I attended a day long meeting with Blue Cross Blue Shield of Florida today with a couple of their senior managers.

While there are some good things in the works for Blue and their agents (potentially) regarding compensation within the Federal Exchange (Florida will not have a state exchange) the thing that most surprised me was that plans sold after PPACA will disappear on their anniversary date in 2014, period. At least that is Blue's position and probably will be the same for the other major players.

For anyone with a renewal book of business, it will be gone in 2014. Hopefully it will be replaced by 1st year commissions for Exchange plans, which will have an open enrollment for 6 months (October 1-March 31st) for the 1st year, then the same 7 week period as Medicare after that (how stupid is that?).

What that means for consumers is that they either go to the Exchange or pay a penalty and either go without insurance or pick up something from a 2nd tier company.

Blue's internal estimates, by the way, that the comparable plan to one of their current Blue Options plan in the Exchange will have a premium increase of between 40-60%.

Anthem Blue Cross told us the opposite here a few weeks ago

in So Cal

Mostly poor people will be on the exchange



Anybody heard anything on the death panels yet

 

[Ann H]

Anthem Blue Cross told us the opposite here a few weeks ago
in So Cal
Mostly poor people will be on the exchange
Anybody heard anything on the death panels yet

I think the death panels are just for agents.

 

[somarco]

In GI states, usually only 1 or 2 carriers stand, and the rest sell-out to them or pull out of the market. I think carriers took this hook, line & sinker.

Hook, line and STINKER.

Read the rest of your prior post, but someone had commented about the "windfall" to carriers on InsureBlog and they were taken to task. Guess I was having a flashback.

Or I may have been having a flashback.

 

[moonlightandmargaritas]

I think the death panels are just for agents.

We can only hope....