Some feared the start of the Patient Protection and Affordable Care Act exchange program could kill off the traditional individual major medical insurance producer in 2014.
Today, it’s looking as if the problems at the HealthCare.gov federal exchange enrollment system could help keep agents and brokers in the mix.
Agents and brokers have proven that they really are a lot more agile and responsive than a website developed by a committee in Washington.
When the HealthCare.gov enrollment site opened to great fanfare — and got consumers stuck on apology sites — it sent many visitors surfing over to the sites of Web-based insurance brokers and to the sites of traditional agents and brokers who have the ability to sell 2014 individual policies now, free from HealthCare.gov error messages.
How can you turn HealthCare.gov performance lemons into lemonade?
Here’s a seven step recipe.
1. Know yourself.
Figure out what you’re really willing to sell, and to whom.
Are you willing to tell consumers about the exchange plans if that’s what seems to be the best option? If you aren’t already certified to sell exchange plans, are you willing to get certified? Do you actually understand those plans?
If you aren’t much of a fan of the exchange program: How creative and aggressive would you want to be at getting consumers to stay away from the exchanges?
How interested are you in helping consumers avoid the PPACA individual coverage ownership mandate for either practical reasons (avoiding the alleged first-year penalty of $95 or 1 percent of first-year income, whichever is greater … until the Obama administration cries uncle and admits it’s postponing enforcement of the penalty, that is) or reasons of principle?
Do you actually hate PPACA so much that you’d tell consumers to buy crummy coverage on purpose, simply to violate PPACA and show it who’s boss, even though it means the next appendectomy will force the consumers into bankruptcy? Probably not. So, where are your actual boundaries?
2. Know the rules.
What do your state’s regulations and the various agreements you’ve signed with PPACA exchanges, traditional health insurers, exchange plans, your general agents, your chamber of commerce, the Better of Business, your wife, your kids, and your kids’ school’s PTA say about disparagement and rebellion?
If, say, what you really want to do when you grow up is to get consumers to sign statements saying they’ll refuse to enroll in PPACA-qualified minimum essential coverage, and you do that, what do your lawyer and accountant think would happen to you?
3. Try selling non-exchange plans.
As of now, the U.S. Department of Health and Human Services seems intent on implementing the PPACA provisions that require carriers to sell individual plans on a guaranteed-issue basis from now until March 31, and again during open-enrollment periods.
The only health status factor carriers can use to vary the price of coverage is age.
The non-exchange individual health insurance market is still in flux in many states, and prices for your young, healthy clients may have risen sharply.
But you suddenly have a chance to sell to older, sicker people who had no hope of qualifying for commercial coverage before. They have a huge incentive to buy coverage by March 31, to avoid the possibility that HHS will find ways to help insurers limit the pain of the guaranteed-issue rule by letting them impose big penalties and restrictions on “free riders” who fail to sign up for coverage during the earliest possible open-enrollment period.
If any of those older, sicker consumers already have individual coverage and are getting cancellation notices, you know they’ve already come up with the cash to buy private coverage before.
To find them, just run seminars on “what to do about health policy cancellations” in libraries, churches or any other place you can get a room. Or just look for anguished-looking people in public places and ask them what’s wrong.
4. Try selling exchange plans.
No, that won’t be any fun, in terms of application mechanics, but you don’t get paid to have fun. You get paid to crash your head through brick walls of red tape so consumers don’t have to.
Even if, at some point, HHS and the states give up and postpone the exchange program, chances are that exchange plans will have to sell some type of coverage to consumers who get clean applications in by a certain date.
Ignoring the declarations that “consumers have until March 31 to submit applications” and helping consumers get as close to the front of the line as early as possible could turn out to be a worthwhile thing to do.
5. Offer alternatives.
PPACA regulations describe all sorts of alternatives to conventional major medical coverage that could help people get out of having to buy coverage that offers all of the usual PPACA plan bells and whistles
One promising example is the health care sharing ministry.
Today, there are four health care sharing ministries. Members of the ministries promise to pay each others’ medical bills.
Another example is being a member of a Native American tribe.
Maybe, for a modest fee, you could offer referrals to Native American heritage establishment experts.
6. Offer exemption counseling services.
PPACA exempts people who have religious reasons not to buy coverage or who cannot find affordable coverage from having to own minimum essential coverage.
Maybe an exemption counseling cottage industry will spring up, and you can move into that cottage while its cheap.
7. Recognize that mortar is the new brick.
Fashion editors sometimes say this or that color (pink, red, chartreuse) is the “new black.” Meaning that some color usually used for ribbons and buttons has suddenly become the main color for shirts, pants, skirts or dresses.
The green beans served with the meat and potatoes dinner have suddenly taken over as the entree.
If PPACA World continues, then, especially for insurance agents, products traditionally thought of as small gap fillers — hospital indemnity insurace, critical illness insurance, accidental death and disememberment insurance — could suddenly be a much bigger deal.
One noteworthy thing about the exchange plans (and non-exchange individual policies shaped by the exchange plan universe) is that the plans tend to have narrow networks and high out-of-pocket costs. The maximums are not as high as the maximums for some of the bargain-basement catastrophic plans now on the market, but families could easily pay $12,000 per year out of pocket.
And even when the plan does pay for care, it might not pay for a visit with a doctor who actually has time to see you.
PPACA prohibits the sale of the old mini med plans, but it does allow the sale of policies that pay a fixed amout of cash — an indemnity payment over a period of time involving an illness, an injury or a hospitalization, rather than an amount tied to the cost of the care received.
PPACA has no effect on hospital indemnity, accident and critical illness insurance policies, and thus has no direct ability to drive up the cost of those products or interfere with underwriting.
Given that PPACA leaves such big cost holes to fill — and that the market for the hole-filling products is so much freer than the major medical market — the hole-filling markets could become bigger, more lucrative markets.
Think about the many big disability insurers that are suddenly talking about indemnity and critical illness policies. That’s partly because of the damage low interest rates have done to longer-term, more interest rate-sensitive products, but partly because insurers see the possibility of a big market shift.