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May 22, 2015 at 08:51 AM
The nap period insurance market looks as if it should be a great target for traditional agents and brokers.
The insurers and regulators implementing the Patient Protection and Affordable Care Act (PPACA) restrictions on medical underwriting tried to use an open enrollment calendar system to keep antiselection forces from tearing the new system apart.
To discourage healthy people from waiting until they get sick to pay for insurance, PPACA implementers let consumers buy major medical coverage on a true guaranteed-issue basis for only a few months a year, during an annual open enrollment period. During the rest of the year, the nap period, consumers who want to buy major medical coverage must qualify for a special enrollment period (SEP). They have to have moved, had a child, married, or gone through some other life change.
Consumers who cannot qualify for SEP must buy a product other than major medical coverage, such as short-term health insurance or critical illness insurance, or wait until the next open enrollment period to get covered.
The nap period market is complicated, and many of PPACA public exchange programs seem to have done a poor job of serving the consumers who qualify for SEPs. One sign that public exchange SEP sales were low is that public exchange managers published little 2014 public exchange SEP activity data.
The lack of major medical product access gives producers a chance to sell non-PPACA gap-filler products that may pay solid commissions. But the little drips of data available suggest that the 2014 nap period market was also disappointing for many sellers outside the public exchange system.
The numbers of consumers who tried to buy coverage during the first PPACA nap period seems to have been smaller than expected, and the percentage of would-be SEP shoppers who were actually able to qualify for a SEP seems to have been low.
Some top health insurance marketers argue that agents and brokers should be able to find ways to greatly expand nap period sales as they come to understand it better.
See also: View from PPACA World: Jeff Smedsrud
For a look at ideas for increasing nap period sales, drawn from interviews and recent survey and data analysis reports, read on.
1. Smile: The PPACA exchange system helped show why you matter.
Just two years ago, PPACA public exchange builders who had never tried to sell insurance talked as if most consumers in the individual health insurance market would buy coverage through a smoothly running, fully automated Amazon for health insurance, with little or no live-human involvement, for, roughly, free.
Today, many of the organizations that tried to run “volunteer” or paid nonprofit enrollment operations are complaining that exchange payment levels and requirements are unrealistic. The more successful exchanges are getting more and more of their enrollees from agents and brokers.
Earlier this year, the Henry J. Kaiser Family Foundation sponsored a survey of 804 U.S. adults who had purchased their own health insurance. Foundation analysts found only a slight drop in the percentage of participants who had purchased their coverage through an agent or broker, to 27 percent this year, from 29 percent a year ago.
Some consumers said they had received some help from a live human when buying their health coverage: 33 percent of those consumers said they had received help from an agent or broker this year, down just slightly from 34 percent in 2013.
See also: PPACA exchange update: Distribution is hard
2. Think about why consumers are shopping for health coverage today.
Ryan Smolek, a vice president at GoHealth.com, said in an interview that about 30 percent to 40 percent of the consumers shopping for health coverage now seem to qualify for SEPs.
