Your BC/BS Letter Is In The Mail...!

[txagt39]

Be expecting to receive you letter from BCBS of Tx, they have found yet another way or should I say excuse to cut agent commissions. While they continue to await regulatory guildance they are going to move forward with their focus on reducing their internal operating costs....which will also require reductions to our Individual Product distribution costs. A nice and obscure way of saying we're gonna screw you over on commissions once again. Effective 1-1-11 for all new business submitted after that date. They will send out yet another letter later on before 1-11-11 with the news about exactly what our new commission structure will be.

I have to ask if their immense efforts to reduce internal operating costs includes cutting the salaries of their highly compensated executives? That was a good one even if I do say so myself.....

 

[Crabcake Johnny]

If they eliminated the salaries of every executive, maybe that would account for 1% in the way of agent commissions.

 

[AllenChicago]

Here in Illinois BCBS is already the lowest paying company, in my experience. They do most of their sales via the www.bcbsil.com website anyway. We the agents don't need them to make a good living and it's been obvious over recent years that they don't need us.

Since BCBS of Texas and Illinois are both owned by the same holding company, it's just a matter of time before this even feebler commission structure arrives here as well. There will be no complaints at our brokerage, that's for sure.

 

[somarco]

most of their sales via the Blue Cross Blue Shield of Illinois - Health Insurance Illinois - BCBSIL website anyway

That's interesting.

I haven't seen figures in some time, but about 3 yrs BCBSGA got something like 40% of their business direct. The rest came through brokers.

 

[txagt39]

That's interesting.

I haven't seen figures in some time, but about 3 yrs BCBSGA got something like 40% of their business direct. The rest came through brokers.

They want their cake and to be able to eat it too, wouldn't we all? They court agents so we do still contribute something to the bottom line. They realize that many, and especially in our rural area, most clients need help, that's where agents provide a role that carriers selling direct cannot, at least yet. If they could all do it without agents we would have been out of a job a long time ago. They are all working on eliminating us but they haven't figured out how to make up for the folks that will not buy it over the phone or on the internet. We still have some folks who won't do either - when that changes so will the climate. They would ALL cut our throats if it meant an extra nickel in the coffer. My comments about the execs pay was a joke, they all have golden parachutes they fly off in as they retire or get fired and as they are whisped away into glory they drop little pellets of poop on those on the ground still trying to make a living by providing a service to consumers - shame on us.... It amazes me how the big corporate culture of "we want to get bigger even if we have to cra_ on everyone below" amazes me, their profits rise and yet they keep screaming we're losing money - what a pile of hooey! I dare them to show us their middle to top level managers pay - THEY ARE NOT CUTTING ANY CORNERS ON THEIR COMPENSATION - BETCHA!!!!!!! Greed is an awfully ugly thing.
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If they eliminated the salaries of every executive, maybe that would account for 1% in the way of agent commissions.

Exactly! But they won't go there now will they? At the upcoming BC seminars why not ask one of the execs there if they are taking any paycuts? I bet they escort you out the back door so fast your eyes would water. They are just a bunch of well dressed thieves - I hope they all go down the toilet greedy lot of pond scumb. They are capitalizing on an media opportunity to cut commissions nothing more, nothing less. They think we're too dumb to realize it.

 

[AllenChicago]

What's so appalling to me is how quick these companies are to target agent commissions, even though a final ruling as to whether or not agent commissions will be calculated in the 80% Individual Medical Loss Ratio has yet to be made by the Feds.

Are we REALLY that big of an expense to these companies? Sure, we get 18% to 30% of first year premiums, but comparatively little compensation after year 1 of a policy.

 

[VolAgent]

Exactly! But they won't go there now will they? At the upcoming BC seminars why not ask one of the execs there if they are taking any paycuts? I bet they escort you out the back door so fast your eyes would water. They are just a bunch of well dressed thieves - I hope they all go down the toilet greedy lot of pond scumb. They are capitalizing on an media opportunity to cut commissions nothing more, nothing less. They think we're too dumb to realize it.

Dude, you dropped your Communist Party Pin.

Just in case you haven't realized, you are a middle man, and it makes economic sense to remove the middle man if they aren't delivering value. But if you deliver value, then a middle man is desired. I guess the question is, are you valuable to the process or not?

And admit it, you'd trade jobs with any of those executives in a heartbeat. The board has decided they are worth what they are paid, I'm sure you try to maximize your compensation. So why hate on someone else for doing the same thing?

 

[somarco]

If agents are eliminated, one way or the other, the carriers still have acquisition costs. If the lowest cost way to get their products to market was direct to consumer, none would pay a commission. But most carriers, Blue being the exception, rely on agents for close to 90% of their business.

FYC is amortized over 3 years so when you fact in renewals and breakage the commission comes in around 11 - 12% of gross premium.

Carriers give more than lip service to agents. They know we drive premiums and deliver at a lower COA than anything internal they do.

 

[TXINSURANCE]

What's so appalling to me is how quick these companies are to target agent commissions, even though a final ruling as to whether or not agent commissions will be calculated in the 80% Individual Medical Loss Ratio has yet to be made by the Feds.

It's good to dream, but...

 

[txagt39]

Dude, you dropped your Communist Party Pin.

Just in case you haven't realized, you are a middle man, and it makes economic sense to remove the middle man if they aren't delivering value. But if you deliver value, then a middle man is desired. I guess the question is, are you valuable to the process or not?

And admit it, you'd trade jobs with any of those executives in a heartbeat. The board has decided they are worth what they are paid, I'm sure you try to maximize your compensation. So why hate on someone else for doing the same thing?

Spoken like a true shareholder! Kudos.