Sunset for Individual Plans Written After PPACA

[FLM]

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!

Ann, I agree with you 100%-fortunately, I have about a 3 year window of need to work through this crap, after which it won't matter to me.

I won't give up my growing Medicare book or efforts but if they want to throw me a bunch of money (in the form of a fixed fee per person) in 2014 to enroll people in Exchange plans to help replace the money I'm going to lose in my renewal book that seems like a fair trade.

The other part of this for agents is that once you have enrolled a client in an exchange plan they are your client, it will be time for health-only agents to learn the other parts of the business and cross-sell.

 

[Ann H]

I'm a little worried about that 3-year life expectancy of my income, though. I figure that I need to re-invent my career now, and in 3 years re-invent it again. I'm wondering if I shouldn't just skip the 3-year interval and go straight for long-term business model. I'll wait until after the election to analyze it further, but these bullet points keep depressing me and making me think I'll just sell something simple online for a living - say violins, or tutus, or perhaps cute gift items where the learning curve is diddly-squat. Here are the reasons I'm considering that:

• By 6/2013, insurers will begin bringing out plans. Some insurers will have delays until 9/2013. There will be seminars and webinars to attend, SPD's to read, and (thank-God) forums like this to help us sort it out.
• By 9/2013 we will need to be certified by the government agencies, both federal and state, and probably certified by the insurers. Seminars, webinars, classes, exams, probing questions, documentation, rules & regs.........
• by 9/2013 we need good quote engines or other automated systems to analyze, communicate and enroll, because this will be a volume business. Websites must be running well, with good SEO. Quotit or Norvax must offer new services, and we must automate our processes for efficiency.
• By June to October 2013, many IFP clients will cancel their plans and surf the waves of risk until they reach the safe harbor of GI Obamacare. This is a loss of commission income that will immediately hit, right when we're busy reinventing ourselves, certifying and beginning open enrollment
• During open enrollment (probably 10/2013 to 3/2014), we will be working like crazy, but the premium won't be paid until 1/2014 at the earliest, and delay in accounting and commission runs will mean that we won't see the income until 2/2014 or 3/2014 at the earliest. That means there's a hole in our income from 10/2013 when clients begin to cancel in-force plans until the commission from the new plans arrive in Feb-March 2014.
• By 11/1/2013, all my group clients and most of my IFP clients will be asking me to re-quote their health insurance every which way, with lots of variables. I have a responsibility to my current book, but it will take valuable time, and that's time that I need to spend getting new clients.
• By 12/31/2013, many small group plans will fold and employers will dump their employees onto the waiting arms of the exchange and its friendly navigators. About half of those employees may want me to help them. Employees don't tend to love the broker who worked for their employer's former group plan, so I expect to lose half of them. Thank God I know the owners & top management well, as they will probably buy outside the exchange.

Hopefully, if the 1st year commission is competitive, I can make a run. But all that certifying & re-inventing my business model makes me wonder if I should even do it. Yes, a seasoned sales person with no administrative duties could do a good run for the high 6 figures and maybe 7 figures. But those of us designing our websites, doing customer service, accounting and all other aspects of running our businesses will have our time tethered to an anchor. And then, renewal commission will probably drop to 1/2 in the second year (with little new-sales since everyone just bought the year before). And in 3 years I expect the entire thing to implode and Obama-dream-rescue to bring national healthcare as the solution. So, in 3 years we will be extinct or else need to reinvent ourselves again. I'm thinking I'll sell tutus on Ebay instead.

 

[somarco]

The Tutu Project | Raising Awareness for Breast Cancer. Images by Bob Carey.

 

[Yagents]

I'm a little worried about that 3-year life expectancy of my income, though.

First, remember there are 1.9 million Arizonans over the 400% poverty level. There are 2.4 million that will not get medicaid, but will get subsidies.

Next, I'm already having my 2014 discussions. Over 80% of my grandfathered client discussions so far will be keeping their GF plan post 2014 due to high income. And all of my Non GF clients know there current plan will be changing, and we'll be buying something new in a year from now.

Finally, starting Jan 1, any client that is ready to bail, or any prospect buying new into a non GF market, it's going to be short term major medical as earned 80% of the time, and revisit in late 13'.

 

[somarco]

Have you ever seen what happens with a closed block of business?

Those grandfathered plans are at least 2.5 yrs old now, some older and no new applicants coming in. That block is getting older and sicker.

The rates going forward are not going to be pretty.

 

[Yagents]

You play your cards until it blows up (if it blows up) or it doesn't make sense to keep it any further..

Do you talk to your grandfathered clients? My family of 4 GF clients making 100k/year, and paying $500/mo for an HSA will be on it for a long time. Otherwise, you're looking at about a 100% increase in 2014 if they don't keep it, or wait for the closed book to blow up with cumulative 100% rate increase. But that may not happen.

If more people find keeping their GF plan makes sense, the longer til it blows up. Also, the rollover market will no longer be based on health claims/status (GI now), it will be based on finances. Sick people can bail too in the new exchanges. Last I checked, higher income clients will want to keep GF status for financial reasons, and they tend to be healthier group as a whole. Lower income, who typically have higher claims, will bail to the subsidized exchange, for lower price/better coverage. New rules, new game.

 

[moonlightandmargaritas]

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

What sort of transgression were you guilty of that led you to have to endure this kind of torture?

 

[AllenChicago]

The Tutu Project | Raising Awareness for Breast Cancer. Images by Bob Carey.

Somarco, are you the guy in the pink tutu? Is this your project?
-Allen

 

[FLM]

one brief comment for optimism regarding the end of the pre-2014 plans:

According to the Florida Blue people, anyone who purchases a plan in 2013 will be able to keep it until the anniversary date in 2014, thus delaying the much higher premiums for the Exchange-unless the insurance companies pull these plans off the market (they most likely won't) it's likely there will be a buying spurt in the 2nd half of next year to get save money in 2014 for those above the 400% FPL level.

 

[pahealthquotes]

I'm a little worried about that 3-year life expectancy of my income, though. I figure that I need to re-invent my career now, and in 3 years re-invent it again. I'm wondering if I shouldn't just skip the 3-year interval and go straight for long-term business model. I'll wait until after the election to analyze it further, but these bullet points keep depressing me and making me think I'll just sell something simple online for a living - say violins, or tutus, or perhaps cute gift items where the learning curve is diddly-squat. Here are the reasons I'm considering that:

• By 6/2013, insurers will begin bringing out plans. Some insurers will have delays until 9/2013. There will be seminars and webinars to attend, SPD's to read, and (thank-God) forums like this to help us sort it out.
• By 9/2013 we will need to be certified by the government agencies, both federal and state, and probably certified by the insurers. Seminars, webinars, classes, exams, probing questions, documentation, rules & regs.........
• by 9/2013 we need good quote engines or other automated systems to analyze, communicate and enroll, because this will be a volume business. Websites must be running well, with good SEO. Quotit or Norvax must offer new services, and we must automate our processes for efficiency.
• By June to October 2013, many IFP clients will cancel their plans and surf the waves of risk until they reach the safe harbor of GI Obamacare. This is a loss of commission income that will immediately hit, right when we're busy reinventing ourselves, certifying and beginning open enrollment
• During open enrollment (probably 10/2013 to 3/2014), we will be working like crazy, but the premium won't be paid until 1/2014 at the earliest, and delay in accounting and commission runs will mean that we won't see the income until 2/2014 or 3/2014 at the earliest. That means there's a hole in our income from 10/2013 when clients begin to cancel in-force plans until the commission from the new plans arrive in Feb-March 2014.
• By 11/1/2013, all my group clients and most of my IFP clients will be asking me to re-quote their health insurance every which way, with lots of variables. I have a responsibility to my current book, but it will take valuable time, and that's time that I need to spend getting new clients.
• By 12/31/2013, many small group plans will fold and employers will dump their employees onto the waiting arms of the exchange and its friendly navigators. About half of those employees may want me to help them. Employees don't tend to love the broker who worked for their employer's former group plan, so I expect to lose half of them. Thank God I know the owners & top management well, as they will probably buy outside the exchange.

Hopefully, if the 1st year commission is competitive, I can make a run. But all that certifying & re-inventing my business model makes me wonder if I should even do it. Yes, a seasoned sales person with no administrative duties could do a good run for the high 6 figures and maybe 7 figures. But those of us designing our websites, doing customer service, accounting and all other aspects of running our businesses will have our time tethered to an anchor. And then, renewal commission will probably drop to 1/2 in the second year (with little new-sales since everyone just bought the year before). And in 3 years I expect the entire thing to implode and Obama-dream-rescue to bring national healthcare as the solution. So, in 3 years we will be extinct or else need to reinvent ourselves again. I'm thinking I'll sell tutus on Ebay instead.

looks like you need to hire some "Good Assistants" and make a run for that 7 figure income! Thats what the plan is here.

Best Wishes!