As we begin 2017, we thought we’d share our top three predictions for the New Year. Perhaps more than ever before, brokers who are able to see where the market is going will be able to position themselves for success. In contrast, those who are slow to respond could miss out on a big opportunity.
This seems like a pretty safe bet: HSAs have grown at a steady rate since they were introduced 13 years ago, and there’s no reason to believe that this trend will reverse. Our prediction is that Health Savings Accounts will grow even more rapidly than in the past. More details on why we predict that in a blog post later this month, but here’s an overview:
Nearly every Republican replacement plan for the Affordable Care Act includes extensive ideas about how to expand Health Savings Accounts. As a result, we could soon see higher contribution limits, more eligible expenses, and more flexibility in the types of coverage that would be HSA-compatible. Additionally, several proposals discuss the development of transparency tools to help increase health care consumerism, so HSAs should be much more “user friendly” than in the past.
What this means for brokers is that both group and individual health plans will be easier to sell, primarily because HSA-compatible plans have fewer moving parts; since they don’t offer copayments prior to the deductible, it’s not as difficult to compare the available options. It also means that there will be an opportunity to sell supplemental insurance and other products to help reduce the up-front exposure. When you discuss these ideas with your clients, you should present them as a total solution. For instance, you could say:
“Health plans aren’t built the way they used to be. Today’s policies have much higher deductibles and don’t have the up-front copayments for doctor visits and prescriptions that you’re used to. So I’m going to recommend a high deductible health plan to provide catastrophic protection in case something unexpected happens, an accident and critical illness policy to help pay those out-of-pocket expenses, a telehealth program that gives you inexpensive access to a doctor by phone, and a Health Savings Account so you can pay for prescriptions and other qualified medical expenses with tax-free dollars.”
Develop your own sales pitch and start practicing today—you’ll give it again and again in 2017.
2017 will be a time of change. President-elect Trump and the new Congress promise that they will repeal the Affordable Care Act, or at least major portions of the law. This means that the rules will be different, and when the rules change so could the products we sell.
For example, the individual mandate started in 2014, and as a result participation in Health Care Sharing Ministries, which provide an exemption from the individual shared responsibility penalty, quickly grew. The modified adjusted community rating rules for small group plans also went into effect in 2014, so a number of self-funded options for small-business employers were introduced. And the employer mandate kicked in starting in 2015, so large-business employers who hadn’t previously offered health insurance to their employees began offering “skinny” minimum essential coverage (MEC) plans.
All three of these solutions—Health Care Sharing Ministries, level-funded plans for small-business employers, and MEC plans—were created or adapted to provide other options to employers. The same thing will happen in 2017, but the products that will emerge will depend on which rules are changed.
A second reason to believe we’ll see a number of new solutions in 2017 is because new administration has promised that we will. Donald Trump, Paul Ryan, and others have ideas to change the direction of health insurance, and some of those ideas involve the development of new insurance and financial products. For instance, HSA expansion and the proposal to increase price transparency will drive development of new consumer-directed solutions. The new defined contribution rules will create a growth in Qualified Small-business Employer Health Reimbursement Arrangements. The push to sell insurance across state lines will create a need for nationwide networks or could lead to a return of the old indemnity plans. And there will likely be several others we haven’t yet thought of.
A final reason we expect to see more creative solutions in 2017 is that, despite the efforts of the Trump administration and the Republican-controlled congress, health care will still be expensive, which means health insurance will still be expensive. Nobody can snap their fingers and make the problem go away, so people will still need to find creative alternatives to protect their families’ finances. The new administration may be less likely to restrict the sale of short-term plans, limited-or-fixed benefit plans, and other options that may not provide both comprehensive and permanent coverage. With a continued need for lower-cost coverage and a new administration in Washington, we may see carriers add a new twist to these old solutions.
At AHCP, we’ll do our best to keep up with all the changes and provide you with the products you need to help your clients.
In 2017, trusted advisors will be in high demand. As already stated, this coming year will be a time of rapid change, and that means our clients will be confused.
Agents and brokers who can stay calm in this time of turmoil; provide honest, accurate, and timely information; and offer new solutions as they emerge, could grow their business exponentially over the next year. This won’t happen, though, without excellent communication. Early in 2017, you should let your clients know that the Affordable Care Act is still the law but that parts of it may be changing in the months to come. Tell them that there will be a lot of misinformation out there but that you’ll be sure to keep them up to speed on any developments that might affect them, their families, and their businesses. Also let them know that they’re likely to hear about some new cost-saving solutions but that they shouldn’t do anything without talking with you first – again, you’ll be monitoring the situation and will let them know when an idea emerges that may benefit them. In other words, you need to set the stage and do some pre-selling before we even know what new products we might be offering.
Best of luck in 2017 – it should be an exciting and profitable year for everyone. Please let us know how we can help you succeed.