This is the third and final post in a three-part series about the changes we can expect next year. In part one, we pointed out that we’ll have a new President, Congress, and Supreme Court Justice in 2017, and that combination could mean big changes for the Affordable Care Act. In part two, we talked about the more immediate and mostly negative changes to the health insurance products we’re selling, particularly those in the individual market: higher premiums, higher cost sharing, smaller provider networks, and fewer competitors. In this post, we’ll discuss a few practice management considerations for agents—things you need to consider when determining what market segments you’ll focus on, what products you’ll recommend to clients who can’t afford major medical coverage, and how you’ll get paid for your efforts.
This is part two of a three-part series about what we can expect as we head into 2017. In part one, we examined the three big political changes: a new President, a new Congress, and a new Supreme Court Justice. In this section, we’ll look at some of the big changes we can expect with the products we sell, particularly those in the individual market.
For those who thought things would settle down by now—nearly seven years after the ACA was signed into law—think again. It’s pretty clear that 2017 will be another tumultuous year, so we thought it would be a good idea to look ahead and tell you what’s on the horizon for the year to come. There are too many changes to cover in a single article, so we’ll tackle a few at a time. In this three-part series, we’ll discuss the big 1) political developments, 2) product changes, and 3) practice management considerations for 2017. Let’s start off with the upcoming election and what it could mean for the health reform law.
When you enter the voting booth in November, there are lot of things to consider and a lot of reasons to vote for—or against—one of the two major candidates running for President. This article has nothing to do with that. Everyone has their own political issues that are important to them, and it’s not our job to tell you how to vote. That said, we know that agents are concerned about how this election might affect the Affordable Care Act in 2017 and beyond, and we also know that your clients will be looking to you for guidance. With that in mind, we believe this is a great time for a quick overview of both Hillary Clinton’s and Donald Trump’s health care proposals. You can get more information on the Clinton and Trump campaign websites.
For the past few months, we’ve commented several times that we’re not sure what’s going to happen with the individual market this fall while continuing to point out that it could be a mess. If you’ve kept up with the news over the past several weeks, now you see why. A number of major carriers have announced that they won’t participate in the federal or state marketplaces in 2017, and those that remain are making a number of premium and plan design adjustments that our clients won’t be too happy with. That’s why it’s probably time for a “sit down” with your individual clients, particularly the ones receiving a premium tax credit. You need to set expectations for them as we head into the ACA’s fourth annual open enrollment period.
Here are the five main items you’ll want to cover:
Shortly after the Affordable Care Act was signed into law, insurance carriers across the nation, particularly in the individual market, slashed the commissions they pay to agents and brokers.
This was due, in part, to the minimum Medical Loss Ratio requirement that went into effect in 2011. Because carriers are required to spend 80% of collected premium dollars on claims, they must be careful with the remaining 20%; they can no longer afford to pay 10% or more to agents.
There was, however, another reason. Carriers seemed to buy in to the idea that the ACA policies would sell themselves. After all, the government promised carriers up to 30 million new customers; and they were designing a self-service website that insurance shoppers could use to purchase coverage, without the help of an insurance advisor.
As many agents are discovering, health care providers may think twice when treating patients enrolled in ACA-qualified individual plans and receiving an Advance Premium Tax Credit (APTC). If you haven’t studied the ACA grace period rules, you may not understand why. In this post, we’ll provide a quick overview of those rules.
Individuals who purchase coverage through the Federally Facilitated Marketplace (FFM) are required to pay their first month’s premium by the effective date in order for the coverage to start. But, each year, a number of people who sign up for coverage fail to pay the premium and, in turn, their coverage never begins. Or, they fail to pay a future premium, which also puts their coverage at risk.
The IRS recently announced the new HSA contribution, deductible, and out-of-pocket limits for 2017, and not much is changing. In fact, the only change is to the individual contribution limit: it’s increasing from $3,350 to $3,400. Everything else is staying the same.
What’s interesting is that the out-of-pocket limits for non-HSA-qualified ACA plans are not staying the same; in fact, they’re increasing significantly. The 2017 individual out-of-pocket maximum for ACA plans will be $7,150 (up $300 from $6,850 in 2016) and the family out of pocket maximum will be $14,300 (up $600 from $13,700 in 2016).
We like to focus on the things we should be thankful for. You might have guessed, this is a feel-good article. Our hope is that if you’re feeling a bit down, it’ll help you realize how fortunate we all are to work in the insurance industry. We certainly feel fortunate and believe that the future is bright for health insurance agents. Instead of focusing on the negative, we thought we’d focus on the things we should be thankful for. If you ever need to vent or if you just need a little pep talk, please give us a call. Again, we’re pretty excited about the future, and we’ll do our best to make sure you, too, see the opportunities. More importantly, as you search for new solutions, AHCP can definitely help with the products and the training we provide. We are here to help you capitalize on opportunities.
Remember the good old days when agents took a test, got licensed, and then simply had to complete a few continuing education classes each year to maintain their license? Not anymore. If you sell in either the individual or the Medicare markets, the government requires agents to complete annual training to remain certified to sell through the Federally Facilitated Marketplace (FFM). And guess what? It’s that time of the year again.