Lower Commissions on Health Are Knocking on the Door

[Josh]

Consider getting 9 non-res states, and take Live Transfers all day, and you won't have that issue.

If only there was someone that knew how to make that happen!

 

[bluediamond]

The bottom line is this: Much fewer agents will be full-time health agents.

Anyone argue with that?

Can't argue with that, are you still interested in being appointed with BCBSFL?
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Who writes over 20apps a month? I don't think it's possible to be an Independent broker. Whoever does that certainly gets a tip of my hat.

I wrote 25 in November, but I'm captive.

 

[somarco]

As currently structured, Exchanges have subsidies for folks making up to 4x the FPL which pretty much eliminates a good portion of the population that aren't covered by govt plans already (Medicaid) or employer group health.

Don't see much reason to buy outside the Exchange, especially when you can wait until you get sick and then buy.

 

[YouGotMyMoney]

As currently structured, Exchanges have subsidies for folks making up to 4x the FPL which pretty much eliminates a good portion of the population that aren't covered by govt plans already (Medicaid) or employer group health.

Don't see much reason to buy outside the Exchange, especially when you can wait until you get sick and then buy.

Bob, why are you purposely being negative?

Must be the old age.....

Many agents would be happy to live off selling dental and vision plans to exchange customers....

 

[somarco]

Hey Mark, I see you have bought in to the new Humana gene, I mean, bonus pool.

 

[Medigap]

So you missed the free site I put up: Agent Navigator - Permier resource guide for insurance agents. Free insurance training and eduction as well as product and service guides.

I think it's $19.95 less than my association but I'll check again.

(and I see I have to tell my webmaster to correct "premier.")

1) You misspelled "education" - forgot the "a" - I know it's a typo but it's still funny

2) Is it legal for an insurance company to reduce commissions on business already on the books? You signed a contract at the old commission level. What if you refuse the new contract and didn't sell any new business? I'm sure many of them have contract language allowing them to do this ... but has anybody investigated? I believe there are some shady things going on behind the scenes and the insurance companies are attempting to get away with as much as they feel they can. If there are no serious challengers (legal) then they'll be set for years with a bunch of independent agents working for peanuts. This is their coup. If they are legally obligated to continue paying residual commissions on old blocks at the old commission rates it might make more sense to refuse the new contract, quit selling their IFP products, make the initially agreed upon residuals on the old block, and just start selling other products while using the residual income on the old health policies to build your new business.

I believe they all have contract language that gives them the right to change the terms at any time; however, the question is whether that is for any future business or does it give them the right to extend to business written previous to the change? It just seems illegal to allow them to discontinue paying you what was agreed upon for the existing business.

3) This has been a long time coming. As you may know, many of the insurance companies have been wanting to get agents out of the picture for years and (just a hunch) I believe Humana has been at the front waving the flag. I quit selling their products years ago.

4) Health insurance is still viable; however, when you consider "opportunity costs" it's probably not the best place to focus your time.

Just some thoughts and speculation (and conspiracy theories).

 

[Crabcake Johnny]

Thank for the spelling catch. I'm actually hiring a service to go through the site to catch errors. I do some of the content but a lot of the content is done by others and I'm horrible at catching spelling mistakes.

And I do believe (just my guess) that changing comp for existing business would indeed be a contractual violation.

If I wrote a deal in April of this year I did so under the agreement that I would earn "20%" 1st year and "6%" renewals.

I think it would be an interesting court battle for agents/agencies with millions on the books earning say, 5% renewals if the carrier decided to drop it to 3% for the existing book.

I would hope the agent/agencies would win that battle.

 

[YouGotMyMoney]

Thank for the spelling catch. I'm actually hiring a service to go through the site to catch errors. I do some of the content but a lot of the content is done by others and I'm horrible at catching spelling mistakes.

And I do believe (just my guess) that changing comp for existing business would indeed be a contractual violation.

If I wrote a deal in April of this year I did so under the agreement that I would earn "20%" 1st year and "6%" renewals.

I think it would be an interesting court battle for agents/agencies with millions on the books earning say, 5% renewals if the carrier decided to drop it to 3% for the existing book.

I would hope the agent/agencies would win that battle.

Let's do the math as you always like to say

2 million x 5% = $100k

2 million x 3%= $60k

Over one year they lost $40k.....

The question is will they lose more money by fighting the ins carrier in court, lost selling time,legal fees....etc...etc....probably lose their appointment anyway for suing the ins co...lol

 

[Crabcake Johnny]

Remember, the MLR requirements say nothing about cutting agent comp. Although clearly the carriers can lower comp with notice moving forward I don't see how they would be able to get away with it legally for existing business.

We have a contract. Executives don't. A court could decide that comp for existing business must be honored and the carrier would have to make cuts in other areas.

 

[Medigap]

In running any business you consider the cost of marketing versus the return. In a residual income industry it is not uncommon for many agents to spend more marketing dollars with the anticipation that future projected commissions will help them break even in 15 months and everything after that is profit. That's the eHealthinsurance model (I wonder how they're handling al of this). So, when you make essentially a "light switch" move to reduce commissions on existing and future business it puts the agent who planned his/her business in this way to now take a substantial loss. Also, consider the companies that in the past couple of years purchased blocks of IFP business with the anticipation of breaking even after 1.5-2 years and earning profits afterwards.

I have no dog in the fight, and I don't care much for litigation but this seems like an ideal case for a class-action lawsuit.