President-elect Donald Trump and Republicans in Congress may be about to unleash a tidal wave of insurer product design creativity, which will take at least a few months to reach you.
Republicans hope to use a combination of legislation, rulemaking, and creative approaches toward implementing existing rules to change the way the federal government handles health-related insurance products and benefits plans.
Even if Republicans succeed at replacing the Affordable Care Act and making immediate changes, insurers may still need to spend time redesigning and rolling out new products.
Analysts at the Transamerica Center for Health Studies recently revealed many of the health product sales opportunities that exist right now, in a summary of results from a recent web survey of 4,636 U.S. adults ages 18 to 64.
The Los Angeles-based research organization is funded partly by Transamerica, the Cedar Rapids, Iowa-based unit of Aegon N.V. of the Hague, Netherlands.
If the Transamerica Center analysts do have any biases, the biases might be in favor of supplemental health insurance products.
Transamerica units don’t sell major medical coverage. They do sell gap-filler products such as long-term care insurance, dental insurance and Medicare supplement insurance. In the past, before the Affordable Care Act came along, the company sold limited-benefit health plans, or low-benefits-limit health coverage products aimed at employers with tight benefits budgets.
For agents and brokers trying to sell health insurance products today, the best opportunities may involve approaching people who need gap-filler products but don’t yet realize it.
Keep reading for a look at some of the health coverage gaps that analysts found:
Even if Republicans find ways to change health policy in the middle of the year, they may offer some kind of transitional relief to people using the Affordable Care Act public exchange premium subsidies. (Photo: iStock)
1. Major medical insurance
The grim truth is that you may not be able to make any money selling individual major medical insurance this year.
Even dramatic mid-year changes are unlikely to have much negative effect on consumers buying individual health coverage outside the ACA exchange system. The ACA subsidy program could change, but the insurance policies themselves are governed by state law and, in most cases, should be valid until the end of 2017.
Transamerica Center analysts found that 16 percent of the consumers who were still uninsured in September, or about 2 percent of all of the consumers surveyed, said they were uninsured partly because they had no idea how to apply for health coverage.
In other words: About 2 percent of consumers desperately need someone like you to throw them a health insurance lifeline.
Related: Sally Pipes: Mind the ACA gaps
Survey results indicate there may be a genuine need for better consumer education about health coverage and benefits. (Photo: iStock)
About 5 percent of the survey participants who were offered access to an employer-sponsored wellness program are not in the wellness program because they have no idea how to enroll.
That raises this wild possibility: If you have been spending much of your time educating moderately broke consumers about the nuts and bolts of how to buy, pay for and use an individual major medical policy, either through an Affordable Care Act exchange system or outside the ACA exchange system, maybe there’s room for you to offer an employee benefits literacy class and charge, say, $25 for consumers to enroll.
Instead of banging your head against a bureaucratic brick wall to try to get consumers health coverage, give your clients a basic level of literacy, for the sake of a puny commission check. Or, why not charge ordinary, individual people $25 for a slice of pizza and a two-hour benefits literacy class?
Columbus, Georgia-based Aflac Inc. has put the Duck to work quacking about accident insurance for years. (Photo: Eric Reed/AP Photo)
3. Accident insurance
Transamerica and other companies have devoted large marketing budgets to telling employers and workers about this product.
But, when the Transamerica Health Studies Center researchers tried to measure employee access to a list of commonly offered employee benefits products, it found that 31 percent of the participants said they had no idea whether their employer even offered accident insurance.
One way to fill that void might be with a benefits literacy course.
Another might be to take the drug store or farmers’ market table you were using to try to sell Affordable Care Act exchange plan coverage and convert it into a vehicle for introducing consumers to the concept of accident insurance.
Consumers may not realize they can combine this product with the kind of high-deductible health coverage that’s compatible with a health savings account. (Photo: iStock)
4. Critical illness insurance
Many modern critical illness insurance policies can cover the insureds against a long list of the conditions that scare people the most: heart attacks, cancer, stroke and kidney failure.
The products fall outside the scope of the Affordable Care Act major medical coverage requirements. That means the issuers can use as much medical underwriting as they like. But it also means that young, healthy consumers can get plenty of bang for the premium buck.
But just 35 percent of the workers in the Transamerica Center’s survey even knew whether their employers offered critical illness insurance benefits.
There’s a Jupiter-sized hole in their product awareness. Maybe you could sell people individual policies simply by letting them know these policies exist.
Related: John Oliver puts medical debt on TV
Many consumers are aware of cancer insurance but have limited access to it. (Photo: iStock)
5. Cancer insurance
You might be reading this and thinking that most of the consumers who would ever actually buy accident insurance must know about it from bank account mailers, and that many good prospects may be unfamiliar with critical illness insurance because that’s really just a newfangled equivalent of cancer insurance.
You might think that cancer insurance benefits awareness must be much higher than critical illness insurance awareness.
Just 36 percent of the consumers in the Transamerica Center survey sample knew if they’d been offered cancer insurance at the worksite, and 39 percent knew for certain that they had no access to cancer insurance.
This may be the sign of a good opening for offering individual products, and an indicator of how to get your foot in the small-group benefits door.
If just 25 percent of workers have access to cancer insurance and know they have access to it, maybe that’s a sign of an untapped worksite cancer insurance sales opportunity.
Hospital intensive care insurance appears to be a benefit that’s not offered to all that many workers, but that sells itself to the workers who do have access to it at work. (Photo: iStock)
6. Hospital intensive care insurance
The Transamerica Health Studies Center found that awareness of this product was as low as the awareness level for cancer insurance: 36 percent of the survey participants said they had no idea if their employers offered the product.
About 31 percent knew they had no access to the product at work.
But 32 percent of all of the survey participants said they did have access to the product at work, and 18 percent of all of the survey participants said they had signed up for hospital intensive care insurance. In other words: 56 percent of the participants offered that benefit took up that benefit.
The take-up rate for hospital intensive care insurance was higher than the take-up rate for any other supplemental health insurance product on the Transamerica Center survey list. The take-up rate was higher for cancer insurance, for critical illness insurance or for post-retirement health benefits.
Offering this product may be another hidden door into the small-group market.
Affordable Care Act implementation spurred a comback of hospital indemnity insurance. (Photo: iStock)
7. Hospital indemnity insurance
Most of the first insurance policies that covered the cost of treating an illness in the United States were hospital indemnity policies.
They paid specified levels of benefits to insureds who suffered specified conditions in the 1920s.
Since many Affordable Care Act group coverage rules took effect, in January 2014, hospital indemnity policies have made a big comeback, because they are some of the products most similar to major medical coverage that fall outside the scope of the ACA major medical product rules.
Obama administration agencies have gone to great lengths to try to curb the hospital indemnity insurance market, precisely because agency officials and major medical issuer actuaries fear that less-regulated indemnity insurance programs might lure younger, healthier risks away from major medical plans.
Of course: Clients who can afford comprehensive major medical coverage should have it. Hospital indemnity insurance offers much less coverage and helps with bills for a much narrower range of conditions. But it might offer some relief for a client who has no practical way to pay for major medical coverage, even if Republicans leave the ACA major medical premium tax credit subsidy program in place this year. Hospital indemnity insurance can certainly fill in coverage gaps for consumers who already have high-deductible, ACA-compliant major medical coverage.
Just 40 percent of workers know whether they’ve been offered hospital indemnity insurance or similar products at work, and 33 percent they have not been offered access to it.
Twenty-six percent of workers do know they’ve been offered access to hospital indemnity coverage or similar products.
Among the workers who know whether they’ve been offered hospital indemnity coverage or similar products, the take-up rate for the products is 54 percent, suggesting that this is another product with strong consumer appeal.
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