Eric Wilson says it’s still possible to make a living selling individual major medical coverage.
Wilson, the owner of I Sell Health Inc., started the insurance agency in Romeoville, Ill., in 2004. He enjoyed several great years before the Great Recession came along in 2009, and President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law in 2010.
See also: What’s under that PPACA World rug?
Insurers slashed individual business commissions in 2010, and Wilson (photo, right, ISellHealth.com) said he has been struggling to get back to where he was in 2009 ever since. He’s hoping he might finally get back to 2009 revenue levels in 2016.
Wilson, who operates in Georgia, Indiana, Iowa, South Carolina, Texas and Wisconsin as well as Illinois, is in a great position to report on what’s really been happening in PPACA World since the public exchange system came to life in January 2014, and major PPACA product design mandates and underwriting restrictions took effect.
He estimates that about 10 percent of his individual medical customers still have pre-PPACA grandfathered policies; 25 percent have transitional “grandmothered” policies; 40 percent have PPACA-compliant coverage purchased outside the public exchange system; and 25 percent have public exchange coverage.
Most of the public exchange coverage users are getting premium subsidies, and about half of those are getting the PPACA cost-sharing reduction subsidies, which help exchange users with income under 250 percent of the federal poverty level.
For a look at what Wilson has seen, read on.
1. The producer compensation situation seems to be stabilizing.
Wilson says he thinks the average level of compensation in the individual market may now be somewhere around 6 percent of premium.
After falling sharply in 2010, producer compensation seemed to stabilize at low levels for a few years.
Compensation per enrollee fell again in 2014, but the new PPACA underwriting rules made closing sales easier, and that compensated for the cut in per-enrollee compensation, Wilson said.
The shift to PPACA World rules also led to a huge wave of policy cancellations, and sales opportunities, in 2014.
“Last year was a windfall,” Wilson said.
This year, the number of cancellations is smaller, but “there are still quite a few,” Wilson said.