Insurance Agents Must Adapt

The signatures of President Barack Obama, Vice...

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All of us health insurance agents are going to have to reinvent ourselves in light of the Patient’s Protection and Affordable Care Act, aka PPACA, aka Obamacare.  I’ve heard several options from several health insurance agents. Barack Obama did not keep it a secret during his campaign that his goal was to reform the health insurance companies.  In his zeal to fulfill his personal agenda, we insurance agents were acceptable collateral damage.

Some agents plan to increase their life insurance marketing efforts.  They have given up entirely on health insurance and choose to focus on life insurance.

Some agents have taken steps to retrain and refocus on Property and Casualty insurance. Having spent a decade in P & C insurance I know that customer initiated interaction in auto and home insurance is much greater than in health insurance.   It is a totally different discipline than they are used to with many new regulations to learn but the relationships they have already built could help them build a solid base of clients.

Some agents have given up and changed careers.  I find that a shame but I understand it.  After all the training and learning of laws that existed, it can be seen as unfair to change the rules for health insurance in the middle of the game.

I lived through politician interference in the late 1980s.  When I started in the industry Universal Life insurance was still a new product in the market and it was being abused.  Congress wanted to flex their muscles and redid the rules governing the taxation of life insurance.  They developed the MEC, Modified Endowment Contract.

At the time I was a member of one of the top producing offices in the nation with a national life insurance company.  During the health care debates of 2009 I had to continually remind myself of what I heard a vice-president of the company say back then.  Back then he said, “Congress has never passed a law that insurance companies could not adapt to and still make money.”

My transition plans to adapt to the PPACA are as follows.

Under Age 65

For the next 2 years I have no plans to change what I currently do with people under the age of 65.  I am appointed with 7 health insurance companies and help facilitate and expedite the purchase of individual health insurance for my clients and their friends.  

Currently, I am compensated by commissions that insurance companies have added into plan premiums.  The PPACA gave the Secretary of Health and Human Services the ability to establish rules that will affect brokers commissions.  By ruling that broker’s commissions are to be included along with all other administrative and marketing costs insurance companies have no choice but to lower our commissions starting with any policies we write that are effective January 1 or later.

This is just a transitional phase.  In 2014 health insurance agents, as we know them, will be eliminated by the PPACA.  The NAIC is attempting to influence the rules established by the Secretary of HHS regarding the role of brokers in the state exchanges but it is certain, even if brokers are permitted to exist within the scope of the new Exchanges, we will be compensated under the rules of the Navigator plan as sub-contractors of the Exchange and not as commission sales people.

By 2013 my goal is to have 250 client households for whom I may act as a consultant as they seek one of the 4 minimum benefit plans that will be available in the Exchanges.

Over 65

The PPACA says nothing that will affect the compensation for Medigap plans and there is nothing significantly new regarding compensation for Medicare D plans.  While the law does not outright eliminate the Medicare Advantage program it is apparent that the goal of the law is to drive people from Medicare Advantage to traditional Medicare.

My objective is to focus my marketing efforts more on Medigap and Medicare D in the next 3 years.  Ideally, I will have 400 clients over the age of 65 by the end of 2014.

If I am able to accomplish both of these goals, my income in 2015 should approximate, or better, my income in 2010.  With all the changes to health insurance brought by Barack Obama and his sycophants, I will consider myself fortunate if I am able to successfully adapt to the new rules.

If you are a health insurance agent, I know you have been concerned about your future.  Please share your plans to adapt to the PPACA in the Comments area below.  There is still plenty of time for us to reinvent ourselves but that will take time.  We are running out of time for procrastination.  We have to decide what our future plans are.  Your plans may inspire someone else.

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About The Insurance Barn

Husband of 1, father of 2, health insurance agent and insurance trainer.
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