One of the insurance industry developments this year that have us scrambling for solutions is the number of insurance companies that are reducing health care provider availability within their networks. This is happening by reducing the size of their networks or eliminating out-of-network benefits. These aren’t mutually exclusive: some insurers are doing both.
So why would a carrier that is trying to attract new members make a decision to restrict provider access? Well, like with most things, it comes down to expenses.
Brokers across the country are understandably worried about some of the recent developments in the individual market, including carrier decisions to stop paying commissions on products sold during special enrollment periods and to eliminate agent commissions altogether. If these changes have impacted your business, you’re probably nervous about having all your eggs in one basket and are considering looking for new income opportunities.
Here’s an idea: Why not sell Medicare products?
By Medicare products, we’re referring to Medicare supplements, Medicare Advantage plans, Medicare Part D prescription drug plans, or other products that may be of interest to the senior market, such as final expense policies.
If you haven’t ventured into this market segment in the past, there are a lot of great reasons to consider looking into it.
A recent Wall Street Journal article by Drew Altman, President and CEO of the Kaiser Family Foundation, reports on the connection between health insurance and financial security. The article is based on Kaiser Family Foundation polling of California residents who obtained health insurance after the Affordable Care Act took effect.
As Altman explains, “85% of those who remain without coverage in California say it is ‘very’ or ‘somewhat’ difficult to afford health care.” This is significantly higher than the 66 percent of respondents who have “trouble paying the rent or mortgage…as well as paying for gas (57%), utilities (51%), or food (44%).”
We hear it every day – agents are struggling to find individual major medical plans that meet the needs of their small-business clients. Some of the more recent developments in the individual market, designed to keep premiums down, end up making plans less desirable. Deductibles are growing, networks are shrinking, and more prescription drugs are being moved to non-formulary – meaning they aren’t covered under the plan – and yet, premiums continue to rise. Some health care providers are even deciding to stop accepting plans purchased through the Marketplace. How do you fix falling individual medical sales? Go self-funded.
We’re currently in-between open enrollment periods in the individual market, so brokers are receiving a lot of advice—from AHCP and elsewhere—to sell other products that their clients need. It’s not a bad idea considering the number of products our license allows us to sell; indeed, there are insurance products to protect almost anything that’s important to our clients and prospects. Plus, it’s a good time to diversify, to place our eggs in a few other baskets, especially with the current uncertainty surrounding individual health insurance commissions.
But there’s a problem. Actually, there are three problems:
1) our clients’ time is valuable, and they can only devote so much to learning about their insurance options;
2) they have short attention spans
3) they have limited insurance budgets.
As brokers, we have to be both diligent and creative to continue writing business in spite of these constraints.
The third annual open enrollment period under the Affordable Care Act is now over and in the record books, so it’s time to start looking ahead to the next OEP, scheduled to begin on November 1, 2016. This is important because there are likely to be some significant changes for the 2017 open enrollment period, changes which could impact your conversations with existing clients and the way you market individual health plans between now and November.
In an effort to make the Marketplace attractive for both consumers and insurance companies, Healthcare.gov CEO Kevin Counihan stated in a January 19 press release that CMS is eliminating “several unnecessary special enrollment periods” while clarifying the definitions of other SEPs. He also vowed that CMS will provide “stronger enforcement so that special enrollment periods serve the purpose for which they are intended and do not provide unintended loopholes.”
These changes are in response to complaints from health insurance companies that it is too easy for people to wait until they got sick to enroll in coverage, and with continued consolidation in the industry, the government wants to do everything it can to convince insurers to continue offering Marketplace plans.
As you know, the first two enrollment deadlines for 2016 coverage have come and gone. During these last couple of weeks of the annual open enrollment period, people can sign up for coverage to begin on March 1st. We know you’re busy trying to sign up as many people as possible in the last few days, so we’ll keep this short, but we did want to share a couple items with you that may help you better advise your clients and bring in a few more sales.
Health Savings Accounts (HSAs) first hit the scene back in 2004, and since that time they’ve grown at a steady pace. Every year, more and more brokers get on board with consumer-directed health plans and HSA plans in particular. Still, not every agent is a fan. It’s not easy to create conscientious healthcare consumers. Americans have shown an unwillingness to save their money, and, without up-front copayments, some people go without needed care.
But, like it or not, our clients are gravitating towards high deductible health plans (HDHPs) these days. At the bronze level, which price shoppers tend to gravitate to, that’s really all that’s available in the individual market. Many of those who aren’t receiving a subsidy have trouble affording anything else.
A lot of emphasis has been placed on the Affordable Care Act’s premium tax credits over the past couple years—and rightly so. The Advanced Premium Tax Credit (APTC) makes it possible for millions of Americans to purchase health insurance; without the financial assistance, many would likely remain uninsured.
There is another type of financial assistance, though, that gets a lot less fanfare than the APTC: cost-sharing subsidies. While you may have learned about the subsidies when the law was first passed and are likely guiding your lower-income clients to subsidized plans, we thought you might benefit from a quick review of how the subsidies work, in turn enabling you to better explain them to your clients.