The First Victims of Health Care Reform

[HealthGuy]

John: 100% truthful post. But if these carriers drop commissions less than 10% first year (street level) January 1st 2011, it almost makes working not worth it. Seriously, this is ridiculous. The carriers continue to hope we sell their plans but we don't know what we are going to be paid. Who works for free? Since June, essentially, we are working not knowing what we will be paid.

 

[Crabcake Johnny]

Well, we have to watch "not worth it." The P&C and med supp industry chugs right along with around 10% commission and underwritten products. What do stock brokers make on average - something like 4%?

It will be volume and cross selling. Marketing might change - hit the phones or BtoB. I'm not a huge fan of whining. Things are what they are.

 

[HealthGuy]

John: Not trying to dispute your point, but come on - even if you are a million dollar health producer 4% comp puts you only at $40K per year? Really worth it? You better sell life or disability or accident or silly dental plans on about 50% of your health cases or nobody makes it. Tell me how many health agents can cross sell anything to 50% of their clients as the economy stays crappy and these health premiums move up exponentially? Moving millions of dollars as a stock broker at 4% comp is a much more lucrative career than being a health jockey is turning out to be. I'm really not whining, I'm just throwing this out there for conversation...I don't see our market being able to support a realistic career post 2014 or maybe even before. I just don't see it, but I'm not going to become a stock broker now or ever.

 

[TXINSURANCE]

John the MLR is largely the baby of Jay Rockefellar. (D) WV. He is almost soley responsible for this socialist approach and stealing your commissions.

 

[HealthGuy]

Joe: Where does 4% or 5% comp first year leave you? Still in business? How does this proposition sit with you? Seriously, if comp goes this low, and the premiums go way up (which they will) how much cross selling will you or your call center realistically be selling? This notion that we are going to be cross selling the s@#t out of everything is nauseating. If health premiums go up 100% which they will, who in the world is going to be cross selling anything? I don't understand these companies that think indemnity plans are going to be a boom or critical illness is going to boom. I just dont see it.

 

[Crabcake Johnny]

I think we have to watch shouting out numbers like 5%. I'll determine my course of action after carriers announce 2011 compensation which I'm guessing will vary by carrier and plans.

 

[HealthGuy]

Agreed: Maybe I am calling out fire in the movie theater when only the popcorn is burning. I'm sure the carriers could go as low as 5% first year or lower, (flat fee app, per person app, whatever) but who really knows. At this point I'm just as sick of all of this as I was discussing Obamacrap before it passed. Anybody have a barf bag? I'm still nauseated by this entire fiasco. I guess we really had to pass the bill to fully realize what goodies are in it. Can't wait for more!

 

[Crabcake Johnny]

John the MLR is largely the baby of Jay Rockefellar. (D) WV. He is almost soley responsible for this socialist approach and stealing your commissions.

I understand the theory - to prevent carriers from offering garbage yet charging the same premiums as comprehensive plans. We can all name two carriers who were main violators.

This, however, was not the way to solve that problem.

 

[TXINSURANCE]

Joe: Where does 4% or 5% comp first year leave you? Still in business? How does this proposition sit with you? Seriously, if comp goes this low, and the premiums go way up (which they will) how much cross selling will you or your call center realistically be selling? This notion that we are going to be cross selling the s@#t out of everything is nauseating. If health premiums go up 100% which they will, who in the world is going to be cross selling anything? I don't understand these companies that think indemnity plans are going to be a boom or critical illness is going to boom. I just dont see it.

We have already cross sold for many years, this is nothing new to us. That being said there is always room for improvement, and growth in this area. While I am monitoring this situation daily, I have actually been encouraged by some of the numbers being thrown in my direction by some major carriers (encouraged meaning not going out of business, don't get me wrong it is still a pay decrease) - however all are still sorting this out, and nothing is confirmed as of this post.

When the health bill passed, I thought 4 to 5% was very likely. I certainly don't see that at this time. Obviously those in volume will have higher contracts, but even for the street level average Joe producer I see 4 to 5% as highly unlikely.

Also your comment about premiums going up 100% - is very unlikely in the short term (2011). 10/1 rates have posted from a lot of carriers (unlimited preventative, etc., etc.,) and rates barely moved in most cases I have seen 0 to 15%, average maybe 6 or 7%. You will likely see many rates go down as carriers that are currently well below the MLR try to increase their loss ratio. This is going to be a very tough balancing act on the carrier side.

 

[HealthGuy]

Good reply Joe: Thanks! I won't break your crystal balls on this reply, it was helpful...Again, thanks.