Bill Would Split Broker Comp from MLR

[RayNY]

bobson,

There's some solid psychology and consumer research data that paints a slightly different picture (and support's Tater's statement).

Moral of the story: US consumers (as a general population) see themselves as healthier than others, and perceive themselves as less likely to experience negative events with a known probability (the "I can't believe it happened to me" fallacy). They also tend to avoid extremes (best/worst, cheapest/most expensive).

People will choose the least expensive plan that meets their existing needs, without considering future needs or potential usage patterns. They have trouble forecasting their usage, because they have trouble picturing themselves as anything other than perfectly healthy. They can predict a co-pay, or drug usage, but rarely anything less probably. The "extremes aversion bias" means people rarely choose the rock-bottom option. Why the hell do you think the Gov't is indexing subsidies to the second-cheapest? It's a psychology thing.

We, as professionals, find that meeting point for them. They VERY rarely do it themselves if the past few hundred years of consumer data are to be believed. Psychologists call this "déformation professionnelle", which is fancy speak for "experts expecting others to see things the way an expert would".

 

[Ann H]

Very good data RayNY. I also agree with Tater about the copay. As an insurance agent, I point people to the maximum exposure (including deductibles, copays, and out-of-pocket max). But clients often just look at copay and deductible, disregarding OOP completely. That's because they view insurance as a budget plan for regular expenses rather than a protection against catastrophic losses.

 

[djs]

Truth is, most people can't afford to pay their deductible much less their max out of pocket. They hope for a few office visits with a copay.

None of this changes with obamacare in reality.

If something big happens, having the insurance gives them access to care now and they will figure out how to pay later. May be working out a plan to pay $100 a month for forever or declaring bankruptcy, but they get the medical care they need.

With the IRS involved now, they will be able to intercept your tax refunds to pay your medical bills, which will be very helpful to make sure the doctors get their Porsche in for service on time.

Dan

P.S. Dear NSA and IRS agent reading this: I did not mean it. I'm just a bit frustrated over totally unrelated things and I promise to vote for Obama in the next presidential election. Please do not audit my tax returns, or I may have my voting privileges revoked and he will lose a vote.

 

[somarco]

they view insurance as a budget plan for regular expenses rather than a protection against catastrophic losses.

Correction.

They only view HEALTH insurance that way.

If given the choice, how many would pay the stupidly higher premium for car insurance that covers tires, brakes and oil changes?

Or homeowners that covers lawn maintenance, gutter cleaning and window washing?

Of course nothing is ever their fault.

They buy car insurance in case someone hit's them. HO insurance in case their home burns down.

But health insurance so they can go to the doctor.

 

[Ann H]

Correction.

They only view HEALTH insurance that way.

If given the choice, how many would pay the stupidly higher premium for car insurance that covers tires, brakes and oil changes?

Or homeowners that covers lawn maintenance, gutter cleaning and window washing?

Of course nothing is ever their fault.

They buy car insurance in case someone hit's them. HO insurance in case their home burns down.

But health insurance so they can go to the doctor.

Agreed! ....................

 

[Googly Moogly]

Ignorant agent here that has never sold health insurance (I don't count MA products as health insurance):
Presuming the plans were standardized and everything was GI, what value is the agent? If a client goes to the exchange and all the carriers are available, what are the benefits to working with an agent? Let me be perfectly clear, I'm not saying there isn't, but if you had the ear of congress for 10 minutes, why what arguments would you use to help them better understand the value of an insurance agent?

Medicare and Medicare Supplements have been around for awhile. Everything is standardized, however people still need agents.

 

[RayNY]

They don't need us, they want us, big difference.

At the end of the day, if we were gone, they'd all have a bit more work to do. We're not needed like an accountant or an attorney. We're needed like a receptionist, and PPACA is that stupid robot answering machine that gets the job done but not quite as well as a competent human.

Whether you personally agree with that statement or not doesn't matter, it's how the public and lawmakers perceive us.

 

[Yagents]

Ray, the legal code and tax code are so monstrous, most higher income need a lawyer or accountant. The alternative is consignment or Turbo Tax for the lower income. Agents will be the new decoder for the 20,000 pages of regulations for mid/higher income, and navigators/medicaid will be the alternative for lower income.

Not one of my 2000 clients over the past 10 years view me any other way, but providing value. And a large number of politicians are now educated that we actually help bring costs down and are needed to explain this monstrosity to the public to achieve high enrollment projections.

You have a different opinion because you live in NY, which has GI and eliminated any private market years ago. Being an agent in NY, what do you actually sell nowadays?

 

[timsip]

Very good data RayNY. I also agree with Tater about the copay. As an insurance agent, I point people to the maximum exposure (including deductibles, copays, and out-of-pocket max). But clients often just look at copay and deductible, disregarding OOP completely. That's because they view insurance as a budget plan for regular expenses rather than a protection against catastrophic losses.

This is typically the biggest hurdle for people to wrap their minds around the concept of the HDHP HSA. What they don't realize is that the difference between the copay and what the doctor bill will be after the discount is really pretty minimal given the overall savings these plans bring, especially now that preventative is "free". They would rather save $30-50 on an office visit and give up the $5000-7000 in savings in a catastrophic year they would get with a $5000 HSA. After seeing the copays on Covered California, I think this might solve itself. Who has $40 office copays today? They will next year!

 

[bobson]

Medicare and Medicare Supplements have been around for awhile. Everything is standardized, however people still need agents.

I disagree. Companies need us to sell people that company's plan. That's why the commissions are good. Medicare isn't rocket science. We are paid by the companies not the customers. Do you think Mutual of Transylvania would sell any product if they paid a 5% commision? If the government forced seniors to use an exchange to buy a Medicare Supplement plan commissions would drop like a rock. On the exchange every company is the same and the customer can see all the rates on page 1.