Total Meltdown at Insurance Companies

[AllenChicago]

Does anyone have an idea how long health insurers (on average) need to keep a customer to ensure that a profit is made on the policy he/she purchases?

Was wondering when/if health insurance companies would stop writing individual plans this year due to the threat of the policy likely not being in effect long enough to make it "pay for itself".

Perhaps health insurers might start asking income questions soon, like Life Insurance companies do? If a prospect earns $100,000 it's probably going to be a long-term policyholder. If the income is under $50,000, writing the policy is probably a short-term deal, due to the exchange/subsidy.
-ac

 

[somarco]

Does anyone have an idea how long health insurers (on average) need to keep a customer to ensure that a profit is made on the policy he/she purchases?

After 3 years all the underwriting done up front is meaningless and the block will deteriorate unless new policies are continually added.

Even GI follows a similar trend.

 

[AllenChicago]

Thanks for the response Somarco. I'm starting to get some responses from insurers as well, regarding their future strategic business plans and commission "adjustments".

ANYONE HAVE THOUGHTS ON THIS?
One medium sized company ($2 Billion Revenue) is planning on leaving health insurance all-together on 12/31/2013 and focus on their Life, CI, MedSupp lines.

IF this company leaves the health business at 11:59pm on 12/31/203, will all their individual in-force major medical policies then become, in essence, "grandfathered" and not subject to the EHB (and any other) mandates that go into effect on January 1, 2014?

The legal department at this company is saying that if a company is no longer selling health insurance, ALL active policies (both pre and post HCR) can stay as they are on the date the company exits. In this case, the premiums will be WAY BELOW those of the new 2014 policies.

Even if their interpretation of the law is true, I don't think it avoids the IRS penalty-tax...or does it?
-Allen

 

[djs]

But what good does a low premium do for an agent if you can't sell the policy.

Also, after 3 years, the book will deteriorate to the point it will require significant rate increases to keep it viable. You might buy a bit of time, but not sure its a good strategy for an agent.

Dan

 

[taterpeeler]

Thanks for the response Somarco. I'm starting to get some responses from insurers as well, regarding their future strategic business plans and commission "adjustments".

ANYONE HAVE THOUGHTS ON THIS?
One medium sized company ($2 Billion Revenue) is planning on leaving health insurance all-together on 12/31/2013 and focus on their Life, CI, MedSupp lines.

IF this company leaves the health business at 11:59pm on 12/31/203, will all their individual in-force major medical policies then become, in essence, "grandfathered" and not subject to the EHB (and any other) mandates that go into effect on January 1, 2014?

The legal department at this company is saying that if a company is no longer selling health insurance, ALL active policies (both pre and post HCR) can stay as they are on the date the company exits. In this case, the premiums will be WAY BELOW those of the new 2014 policies.

Even if their interpretation of the law is true, I don't think it avoids the IRS penalty-tax...or does it?
-Allen

Who the hell u talking about this is good info if true for the hard working members of this forum

 

[Ann H]

Am I missing something here? This is the 2nd time recently that I have heard the idea that you can keep your current plan... The other one came from a Golden Rule / UHOne email dated 2/20/2013 which says:

For a client considering health insurance coverage, a renewable plan appears to give your clients the most alternatives as we get closer to 2014's Health Care Reform implementation.
• Medically underwritten health plans could possibly have a lower premium over the long term as compared to a Guarantee Issue plan which would cost more since all applicants are accepted regardless of existing health conditions.
• Getting an underwritten plan now gives your clients control over their insurance decisions in 2014. They will have the option of keeping their current plan or purchasing a guarantee issue health plan.​

It appears that UHOne is saying a current plan that is just upgraded to a metal tier and upgraded to include all the EHB's (but not guarantee issued) will cost less than buying a new plan after 1/1/2014. But how can you take a current plan and upgrade it like that without totally changing the policy?

Also, from what I'm reading, it appears that some IFP plans will still have annual renewal dates or rate guarantees, which means they won't have to comply with the EHB rules until their renewal date on or following 1/1/2014. I have already had it confirmed by at least 3 sources that this is true of renewing group plans, but now I've read the same thing about IFP plans that have renewal dates or rate guarantees.

This is not what I initially thought. I have long thought all current non-grandfathered plans were not allowed after 1/1/2014, and only new metal tier and EHB compliant plans would be offered (unless your plan was grandfathered).

Thoughts anyone?

 

[Yagents]

I'm reading and getting word that:

1. IFP Policies may not have to upgrade until their renewal/anniversary date in 2014. If so, with no open enrollment period or qualifying event, they will be stuck until the end of 2014. Sticky biz is a good thing

2. Non GF IFP policies, may only need to upgrade the EHB's on the plans, and not conform to the AV or HSA OOP's or 3 to 1 age rating (only in the exchange), or be mixed in the GI pool.

We may find a "rush" from non subsidy eligible people to buy before 1/1/14 arrives. So, if a company leaves the market, you may find they can leave it the way it is, or just upgrade the EHB's. For agents with books of business, it will provide more stability as this bad boy gets volatile in the coming year.

Ann, can you forward that email to me. I didn't get it. I just read your post after typing mine.

 

[Ann H]

I'm reading and getting word that:

1. IFP Policies may not have to upgrade until their renewal/anniversary date in 2014. If so, with no open enrollment period or qualifying event, they will be stuck until the end of 2014. Sticky biz is a good thing

2. Non GF IFP policies, may only need to upgrade the EHB's on the plans, and not conform to the AV or HSA OOP's or 3 to 1 age rating (only in the exchange), or be mixed in the GI pool.

We may find a "rush" from non subsidy eligible people to buy before 1/1/14 arrives. So, if a company leaves the market, you may find they can leave it the way it is, or just upgrade the EHB's. For agents with books of business, it will provide more stability as this bad boy gets volatile in the coming year.

Ann, can you forward that email to me. I didn't get it. I just read your post after typing mine.

I will forward the email to you. If anyone else wants a copy, PM me with your email address.

I'm hearing so much conflicting information about dates of implementation, but it's such an important point!!! Perhaps several of us should ask our favorite carrier reps if they know if their current products will hold or fold on 1/1/2014, and how much must be changed on a current product post-1/1/2014.

 

[HealthGuy]

Really how about we find out how much we get friggin comped to pimp this new crap? Thats the real question that needed to be answered already. Everything else is secondary really.

 

[Yagents]

The money will folliw those that are educated and can show a better mouseptrap