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The Latest News On Healthcare Reform – Notice from Susan Fowler, VP of United Healthcare/Golden Rule Sales!

November 04, 2010  |   Posted by :   |   Health Insurance   |   9 Comments»

By Michael G. Grace, and Golden Rule

If you have an Individual Health Insurance Policy or you Sell Individual Health Insurance this will affect you!

The Healthcare Reform Issues Continue To Grow…. And we aren’t even close to 2014

Have you received a renewal notice from Blue Cross about premium Increases? How about United, Cigna, Aetna, Assurant, or Humana? Please read the message from United Healthcare/Golden Rule (below) and understand that they are not the only company in Healthcare sending agents these letters right now. Also, understand that after the first of the year, commissions for an agent in the Individual Health Insurance Market could be slashed as much as 80%.

How does this affect you?

Since agents could have their pay cut by as much as 80%, after the first of the year that could make it very difficult for you to find an agent who will be willing to help you with your increases or resolve any issues with your healthcare going forward. The reason being is that it will no longer be cost-effective to be in the Individual Health Insurance Market. The equivalent circumstance that exists already is trying to find an agent who can help you establish a group insurance plan when you have less than 4 employees. Can it be done? Absolutely! Do insurance companies pay an agent to do it? Absolutely not! There is extreme risk in small group and not enough margin to pay an agent. As an agent, both of these scenarios take a tremendous amount of time and effort, a large amount of marketing and networking dollars, and after the first of the year it will no longer be cost-effective to do this type of business if there is a large cut to commissions.

That said, I have always made it my priority to help my clients regardless of commission and I will continue to do so. If you are my client, you made a good choice.

Long term prognosis

The government agenda is to eventually have everyone dealing with health insurance “navigators” in the future. (aka “Bob” in Pakistan, or “Jane” an unlicensed customer service representative at the carrier). It may sound funny now, but when Licensed Insurance Agents commissions are slashed from 18%-24% down to 4% there will be tons of insurance agents who will drop out of Individual Healthcare entirely especially as more and more changes on your health policies continue to arise, and it takes up more and more of their time. There is not any way to run an effective business in that type of dynamic. Even the best CEO’s in the world at United, Blue Cross, Aetna, Cigna, Humana, Blue Shield and many others, are trying to figure out how they are going to make their company run after the reform changes are made.

According to the Health Insurance companies, it is an absolute fact that your rates will be going up due to the reform changes after the first of the year.

Personally, I would like to see the numbers and why it is Health Insurance companies think commissions need to be cut and rates need to go up. I understand that no one gets anything for free, but I don’t understand how they can make such broad sweeping changes when Healthcare companies have no idea how much they will be affected by the reform. All we have heard for the last several months is, “No one knows how reform is going to affect us because it not clear in the bill”. So, the smart person might ask, “If it’s not clear in the bill, and we don’t know how much it’s going to cost, then why all the drastic changes?”.

I hope that you will all start to ask these questions because no one seems to know where any of this money is going. If you know anyone that is having trouble finding a great agent after the first of the year, please call me and I will be happy to help.


Important Notice Regarding Initial Rate Guarantee and Health Care Reform Changes

In response to the recent addition of health care reform benefits, some of you have asked about the impact this may have on our initial 12-month (or 24-month) rate guarantee.
As a reminder, our rate guarantee does not apply to plan benefit changes or address changes. Healthcare reform benefits come at a cost and will affect the insured’s premiums at some point.
For your customers with effective dates of 9/23/10 and later:

  • These customers will not see a rate change due to the health care reform benefits provided as of their effective date until the expiration of the rate guarantee.
  • We are still awaiting regulatory guidance on benefit issues, and states are just beginning to modify their laws and regulations for health care reform. It is possible that additional benefit changes will be made that could affect premiums during the guarantee period.

For all other customers:

  • They will receive additional health reform benefits as of 1/01/11.
  • These customers will experience a rate change due to the additional benefits provided.
  • The timing and size of those rate changes will vary based on many factors: current benefits, rate approval by the state, the insured’s effective date, and whether the plan is “grandfathered” or not.

Please know that we will provide written communication to your client prior to a rate change, just as we do now. If you have any questions about the added health care reform benefits and/or a client’s rate guarantee, please contact your Golden Rule.