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.
Consumers come in all shapes and sizes, and as a result you need different strategies for selling to different consumers. For instance, some people understand the need for health insurance and have plenty of funds to buy it. While they may be a minority, they’re the type of clients that immediately understand the value of having health insurance, and these types of clients are more likely to result in a simple sale for you. But, many other sales take a bit more effort.
When consumers buy less coverage, the cost of that coverage is supposed to go down. But that’s not what’s happened in recent years. Deductibles and out-of-pocket costs are higher than ever before, and so are monthly premiums—for millions of Americans, the new ACA plans really aren’t all that affordable.
For agents, when premiums go up, you’d expect to commissions to go up as well, but that’s not the case. First-year commissions on individual plans were slashed back in 2011; many carriers have cut renewal commissions even further; and some carriers have stopped paying commissions altogether.
It’s hard to believe, but on March 23rd the Affordable Care Act turned six years old. The time’s flown by, hasn’t it? By now you’ve learned how to adapt to the changes created by the law, and you may have even grown your business and your income over the past few years.
Still, many brokers and a lot of their clients aren’t entirely thrilled with the health reform law. While it has lowered the rates for some small businesses and helped millions of people gain health insurance coverage, it’s also increased the prices for other employers and individuals. Those who win tend to like the law; those forced to pay more may have a different opinion.
Either way, at this point most people agree the law is here to stay. After all, it’s already survived two Supreme Court challenges, a presidential election, and a government shutdown—history is definitely on its side. Nonetheless, we’re in the middle of another election season, and once again the leading Republican candidates are promising to “repeal and replace” Obamacare.
The individual insurance market is seeing some hard-hitting changes. Premiums in many markets have increased more than expected, deductibles and out-of-pocket costs continue to go up, and now some carriers are beginning to drop their popular PPO plans.
Dropping of the PPO plans is a new concern and consumers seem to be continually required to pay more and more for less and less coverage. You may be asking yourself, how do sell health insurance if my clients can’t see their preferred health care providers? Many of the newer plans being offered, both on and off the Marketplace, have more restrictive network HMO plans with no non-emergency out-of-network options.
The answer, it’s not easy, but it can be done. People tend to get pretty attached to their doctors, and many also have a hospital of choice, so they will be more reluctant to buy a plan that doesn’t include those preferred providers. This may seem like a no-win situation for you, and some brokers may be considering giving up on selling individual health insurance. Before you start having similar ideas, we thought we’d share some of our thoughts with you about how we view the reality of selling these smaller network HMO plans.
More and more people these days are working past age 65, so many of them have a tough decision to make: should they stay on the company’s group health plan, drop the group coverage and enroll in Medicare, or sign up for both the group health plan and Medicare? The answer, like many in the insurance world, depends on the employee’s own unique situation. This post, while not comprehensive, will point out some of the things people need to consider when evaluating their coverage options.