It’s been a couple weeks now since President Trump was sworn into office and almost immediately signed an executive order minimizing the economic burden of the Affordable Care Act. Since then, legal scholars, health policy experts, insurance agents, and employers have all been trying to figure out what exactly it means.
For those who haven’t seen it, here’s the full text of the executive order:
We all know that, for nearly every product or service, people are much more likely to buy when they receive a recommendation from a friend. For some reason, though, a lot of insurance agents are reluctant to ask their satisfied clients if they know anyone who could use their service. Other brokers ask but without much success.
Whatever the reason, if you’re not getting as many names and numbers as you’d like, here’s an idea you might want to try: instead of asking for referrals, you can ask for a testimonial—a short statement that you can share on your website or on social media. Most people are happy to give you one, and when they do you’ll have a powerful tool that will help build credibility with other prospects. After all, the first thing many people do when shopping online is read the reviews.
Here’s a fun idea: ask your satisfied clients to organize an “insurance party” for their friends and family members.
These days, kitchen gadgets, jewelry, nutrition drinks, and all sorts of other items are sold at small parties organized by the company’s clients. You’ve probably been to one or more of these events yourself, and while you might have dreaded it when you were first asked, chances are you ended up having a good time and spending a little bit of money. While the concept of in-home sales parties may sound a little strange at first, companies market this way because it’s incredibly effective.
Insurance agents, however, don’t typically ask their clients to set up these sorts of events. Why not? Everyone needs to protect their family from financial loss, and existing customers certainly see the benefit in the products they purchased.
In reviewing the various ACA replacement proposals, there’s one suggestion that keeps popping up again and again: allowing carriers to sell health insurance across state lines. President-elect Donald Trump, Speaker of the House Paul Ryan, and HHS Secretary Nominee Tom Price all support this idea, as do Ted Cruz, Orrin Hatch, and other prominent Republicans who have also introduced their own health care bills.
Supporters of the Affordable Care Act, though, are quick to point out that this recommendation will do little, if anything, to bring down costs or reduce the number of uninsured. Their argument is that almost all health insurance plans work with provider networks that may not be available in all states, which makes it difficult, if not impossible to expand to areas where they don’t have a network providers, whether selling across state lines is legal or not. In fact, many markets have a single dominant carrier with large market share, because it has the best provider discounts. Since the rates carriers charge are directly related to the contracts they have with network doctors and hospitals, it’s difficult for vendors to enter a new market.
You’ve probably seen the news recently about EpiPen’s very public “shaming” over what many consumers believe to be unethical price increases on its life-saving epinephrine injections. People with severe allergies, including a lot of children, rely on EpiPens when they have an allergic reaction. Schools across the country stock the pens just in case something happens, and worried parents make sure they have a couple on hand at all times.
What people are so upset about is the fact that EpiPen has increased its price significantly over the past few years, from about $50 per shot in 2007 to more than $300 per shot today according to Bloomberg. In 2012, EpiPen’s parent company Mylan started selling the epinephrine auto-injector only in two-packs (even though they expire after one year), doubling the price consumers must pay at the pharmacy.
Though the price of EpiPens has risen significantly faster than inflation for the past few years, there’s no evidence that the product has become more difficult or costly to make; greed appears to be the driving factor behind the price increases.
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.
Prediction #1: HSAs will grow in popularity
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:
If you’re like most agents, you’re probably hearing a lot of complaints from your individual health insurance clients these days. There is, after all, plenty to complain about: higher premiums, higher out-of-pockets, reduced formularies, smaller provider networks, and fewer carriers offering plans. Once covered, a lot of people end up paying for most of their care themselves since a majority of services are subject to the calendar-year deductible, leading some to question why they have health insurance at all.
When faced with this question, agents normally point out that the real reason for insurance isn’t to cover lower-cost services like doctor visits and prescriptions but rather to protect people against big, unexpected claims. In the same way that you need homeowner’s insurance in case your house burns down, you need health insurance in case you wind up in the hospital. That’s a true statement, but if your clients still don’t see the value in today’s plans, we have another idea. Why not point out the features of the policy they might actually use?
After warning for months that consumers will have fewer choices when shopping for individual coverage this fall, in this article we’ll discuss some new options that may be available for the 2017 open enrollment period.
While it is true that health insurance companies are pulled out of the marketplaces in many areas, many of the non-profit co-ops are going under, and some of the biggest insurance companies are merging together—all of which reduce competition and limit the options we can present to our clients—it’s also true that the number of carriers and number of plan options differ from market to market. In some areas, there’s still a pretty good selection of plans both on-and-off the marketplace, and in those places consumers are struggling with an entirely different problem: how to compare a wide range of dissimilar products and make a buying decision they won’t later regret.
It is, after all, difficult to compare one health plan with another. With different premiums, copayments, deductibles, out-of-pocket limits, networks, and drug formularies, people don’t know how to prioritize the different features and benefits. They may have trouble choosing the best plan for themselves and their families, and might later question whether they made the right decision.
With the exception of very small companies, the vast majority of employers offer group health insurance. And the number one reason they offer health insurance and other benefits is to attract and retain quality employees.
Now think about that for a second. Across the country, one of the top strategies for employers that want to recruit new workers and hang on to the ones they have is to do exactly the same thing that all of their competitors are doing. That doesn’t make any sense, does it?
Health insurance is not a differentiator. Unless the health benefits are much richer than what anyone else offers, employers cannot rely on the group plan as a recruitment and retention tool; it’s not going to make employees choose one company over another. That’s not to say it’s not necessary. On the contrary, in many industries health insurance is expected, so not offering it could deter would-be employees.
Perhaps it’s time to re-think the strategy. If employers can no longer rely on their biggest benefit—group health insurance—as a recruitment/retention tool, how can a company separate itself from the competition? That’s easy. It starts with recognizing the fact that health insurance is just one of the many different employee benefits a company can offer to its employees and the realization that the only way to differentiate yourself from the competition is to offer something that your competitors are not.
In some of our blog posts, we’re able to provide you with actionable information that will help you better serve your clients, and in others we try to give you some ideas that will help you sell more business. This post doesn’t fit into either of those categories. Instead, we just want to put a few things on your radar this Open Enrollment Period. We don’t have a lot of details on most of these items yet, but it’s definitely worth keeping an eye on what’s happening in D.C. during the last few months of President Obama’s second term in office.
While an outgoing president is often referred to as a “lame duck,” that doesn’t mean that nothing gets accomplished. Like most of his predecessors, President Obama still has a few things to mark off of his “to do” list before he hands over the reins to the 45th president. For that reason, we can expect a flurry of new regulations from the various government agencies under the president’s control. Health and Human Services (HHS), the Department of Labor (DOL), and the Internal Revenue Service (IRS) have been hard at work for the past few months, and they’re unlikely to slow down in the weeks to come. The new rules they’re busy writing could have a big impact on our clients starting next year, and some are already in effect.