The Dems Are Whining !!

[stuy119]

From everything I've read on the subject, it's cyclical. Carriers drop agent commissions, sales go down, carriers raise commissions to get agents to sell their products. Seems like it's always a new CEO/President/Chairman that tries the same old idea, only to have it not work yet again.

The key will be to see which carrier realizes that agents are still the 'Holy Grail' of a sales force, one which they don't pay benefits or taxes on, and decides to max out on comp. That carrier will grow their book quicker than others, and likely be able to offer better rates, which in this era is a win.

Hopefully, before the up-swing happens it will take out many of the part-timers and a few of the big guys will go to a P&C only model.

 

[aheff]

Can you say short Aetna stock?
Short term- they are out of the Med Adv business. They are also going to see their ind plans take a nosedive. Not sure how much these two areas make up their sales/profits. Anybody wanna guess?

 

[Franz Kafka]

Can you say short Aetna stock?
Short term- they are out of the Med Adv business. They are also going to see their ind plans take a nosedive. Not sure how much these two areas make up their sales/profits. Anybody wanna guess?

Sure you can short em. AET looking extremely bullish though since Monday. Hmm.

 

[somarco]

AET looking extremely bullish though since Monday

Maybe someone wants to buy them, or merge.

 

[Ann H]

From everything I've read on the subject, it's cyclical. Carriers drop agent commissions, sales go down, carriers raise commissions to get agents to sell their products. Seems like it's always a new CEO/President/Chairman that tries the same old idea, only to have it not work yet again.

The key will be to see which carrier realizes that agents are still the 'Holy Grail' of a sales force, one which they don't pay benefits or taxes on, and decides to max out on comp. That carrier will grow their book quicker than others, and likely be able to offer better rates, which in this era is a win.

Hopefully, before the up-swing happens it will take out many of the part-timers and a few of the big guys will go to a P&C only model.

You couldn't have said it better, Stuy119. I've been in the business 30 years, and have personally experienced this cyclical nature. This particular cycle, however, has hurricane force. Many agents won't be able to survive the downturn before an inevitable upturn begins.

Carriers will watch each other, then modify their position to gain more sales. Aetna was dumb. They made themselves the scapegoat of agent anger by doing the dumbest actions the quickest. They've backpeddled already on 2 issues - one is that they promise to keep in-force IFP business at the old commission rate, the other backpeddling is that in some markets (including AZ) they changed the "fee in lieu of commission" for large group to be groups over 99 lives instead of groups over 51 lives. But Aetna made such incredibly dumb moves that no amount of backpeddling will work at this time. I've heard many agents say they've boycotted Aetna. I've heard it so many times, in so many ways, I think Aetna has made themselves the bullseye of the target of anger.

My prediction (if 30 years of experience will allow me to predict) is that Aetna just lost their sales force. They don't have inside sales agents to replace it. They'll be stuck with accounts agents can't move due to adverse medical history, but they'll lose the fresh blood of new business. Claims will rise, sales will dive (yes, short Aetna stock!). They'll try to reverse themselves, but it will work only partly.

There's an inherent problem in all of this. When carriers make dumb moves that damage them for the long term, they have few options. They can sell out to another carrier (which many do). They can revamp their plans, lower the price, raise the commission and try to induce more sales. Even without MLR, this was a risky move and was inviting higher rate increases in years 2 & 3, and risky business. But with the MLR, they're painted into a corner. The inherent problem in all of this is the shrinking of the carrier pool. Stuy119 said, The key will be to see which carrier realizes that agents are still the 'Holy Grail' of a sales force, one which they don't pay benefits or taxes on, and decides to max out on comp. That carrier will grow their book quicker than others, and likely be able to offer better rates, which in this era is a win." Yes, it may be a win to that carrier, but not to the consumer or agent. Let's be careful about letting any carrier become dominant in a shrinking sales force. With the minefield of Obamacare, carriers are likely to make dumb moves like Aetna did, and pay dearly. They leave the market (either because they exit voluntarily, sell their book to a competitor, or become uncompetitive). Any way that it happens, the end result is the same. The carrier pool shrinks.

This is bad for agents. In any market where carrier selection is 1 or 2 carriers, agents get 0% or low % of commission. So, although I predict that Aetna set themselves up to be "bullseye number 1", nonetheless, having this happen to too many carriers is not a good thing. Having this happen to ONE carrier, when several other carriers still serve your market, however, is a very good lesson from behind the tool shed. Other carriers take note of that sort of thing.

Aetna needs to get a clue. Another thread on this forum is about how many mistakes they make in commissions, and how hard they are to deal with in reversing the errors. Yet another thread in this forum is about their refusal to pay a broker on a BOR letter (for the IFP plans). Yet another thread is about their erratic underwriting. Yet another thread is about the severely limited medical plans that certainly weren't best for the uneducated consumer...

 

[somarco]

My prediction (if 30 years of experience will allow me to predict) is that Aetna just lost their sales force. They don't have inside sales agents to replace it. They'll be stuck with accounts agents can't move due to adverse medical history, but they'll lose the fresh blood of new business. Claims will rise, sales will dive (yes, short Aetna stock!). They'll try to reverse themselves, but it will work only partly.

No argument from me. Aetna seems to be run by baboons. They can't seem to get away from CMS sanctions and now this.

Time for them to concentrate on what they do best . . . which at the moment totally escapes me.

In any market where carrier selection is 1 or 2 carriers, agents get 0% or low % of commission.

Obamacrap has assured us there will only be a couple of players, at best, come 2014.

 

[arnguy]

That's an insult to the baboons, Bob. I think they arer smarter than the Aetna morons.

 

[ijerome]

The Dems are NOT whinning. The bill cannot be repealed. It can be modified, added to, subtracted from etc. but it is here to stay. You post like my high school grandson talks, with little knowledge. And with little experience. So, read the bill and circle the good things and support those. You need not support those things you disagree with, that is unless you don't want any health care bill at all. If that is the case you will be happier getting a real job...flipping hamburgers.

 

[VolAgent]

The Dems are NOT whinning. The bill cannot be repealed. It can be modified, added to, subtracted from etc. but it is here to stay. You post like my high school grandson talks, with little knowledge. And with little experience. So, read the bill and circle the good things and support those. You need not support those things you disagree with, that is unless you don't want any health care bill at all. If that is the case you will be happier getting a real job...flipping hamburgers.

Any law can be repealed.

The bill in its current form will only serve to further damage the health insurance market. Premiums have done nothing to slow, only accelerate since its passing.

Look into TANSTAAFL, hopefully you'll see why this thing is bound to fail.

 

[ijerome]

Vol says: The bill in its current form will only serve to further damage the health insurance market. Premiums have done nothing to slow, only accelerate since its passing.

Yea, the health insurance market was working perfectly until the Dems won both houses and the president's office. President Obama screwed it up in his first 2 years. Just like he was supposed to stop 2 wars immediately. Get over it. The Dems started the reform of health care. And, given time they will reform the tax code. Just for your info, I voted for RR once, GHWBush once, Bill Clinton, never, Al gore and Obama. Only because they were the best at the time they ran.