Difference In Carrier Approaches to Reform

Full Throttle

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It's interesting watching this play out with the different carriers as the Sept. deadline nears. I have two carriers I write 90% of my individual health business through, both only operate in my specific state (we have a unique market):

Carrier #1 (essentially United Health's individual arm in my state): no changes in premiums for new or existing business until the next scheduled renewal, no commission cuts "planned" for the rest of this year or 2011.

Carrier #2 (localized non-profit carrier): shutting down all individual plans as of 9/23 and opening up new plan designs. The state DOI is slow to approve plans, so as of 9/23, there will literally be no plans to sell through the carrier until approved by the state.

If nothing else, it will be entertaining to watch this entire thing go down!
 
I'm more interested in seeing what carriers do with commissions. MLR hasn't been determined whether or not commissions will be included, yet many carriers are already acting as if it will be a factor.

That shows panic.
 
I'm more interested in seeing what carriers do with commissions. MLR hasn't been determined whether or not commissions will be included, yet many carriers are already acting as if it will be a factor.

That shows panic.
If you could still sell your product, yet pay those that sell it for you less, wouldn't you? Would you call it panic if the salespeople at the Apple store got a cut in commission? Not that most carriers are concerned, but I don't know of one that has said how much they will cut commissions, just that they think they will have to.
 
If you could still sell your product, yet pay those that sell it for you less, wouldn't you? Would you call it panic if the salespeople at the Apple store got a cut in commission? Not that most carriers are concerned, but I don't know of one that has said how much they will cut commissions, just that they think they will have to.

As someone said, I think the carriers that understand how valuable the brokers are in selling their product and are willing to invest in them will see an increase in their business and those who think we're just a nuisance, well, I hope they get theirs.
 
The local or regional carrier maybe in real trouble. They just don't have the resources.

The one thing they do have is the ability to change quickly.
 
It's interesting watching this play out with the different carriers as the Sept. deadline nears. I have two carriers I write 90% of my individual health business through, both only operate in my specific state (we have a unique market):

Carrier #1 (essentially United Health's individual arm in my state): no changes in premiums for new or existing business until the next scheduled renewal, no commission cuts "planned" for the rest of this year or 2011.

Carrier #2 (localized non-profit carrier): shutting down all individual plans as of 9/23 and opening up new plan designs. The state DOI is slow to approve plans, so as of 9/23, there will literally be no plans to sell through the carrier until approved by the state.

If nothing else, it will be entertaining to watch this entire thing go down!

Doesn't BSBSAL have a virtual monopoly in the great state of AL?

I think it would be a great move for UH1 to pick-up some market share in AL by keeping commission whole for a year or two. They won't make any money, but they'll gain membership in the short-term.
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As someone said, I think the carriers that understand how valuable the brokers are in selling their product and are willing to invest in them will see an increase in their business and those who think we're just a nuisance, well, I hope they get theirs.

Stuy119...if Obamacare did not pass, the carriers would not be cutting commissions. The carriers know that agents are a key distribution channel, BUT the new law forces them to change. With Obamacare they simply cannot keep the status quo on agent commissions (especially in markets with high commission rates of 20+%).
 
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The local or regional carrier maybe in real trouble.

They are just barely making it now in most cases. I am continually surprised at Coventry which, like Blue, except without the parentage, is a state by state carrier. After 3+ years here they are still rolling out plans with loss leader rates.

Of course their underwriting is tough as nails and even if you can walk on water you might still fail to meet their standards.

Humana is basically a regional carrier, operating in roughly half the states. Aetna and Cigna are in much fewer states and I would be surprised to see either of them make it. World/American Republic are in more states but have such a small market share that it is still impossible to consider them a national carrier.

For all carriers, even high profile ones like Blue, the agent system is the most efficient, least costly way to obtain new business . . . and the carriers know that. The smart ones will find ways to keep the agent in the mix.
 
They are just barely making it now in most cases. I am continually surprised at Coventry which, like Blue, except without the parentage, is a state by state carrier. After 3+ years here they are still rolling out plans with loss leader rates.

Of course their underwriting is tough as nails and even if you can walk on water you might still fail to meet their standards.

Humana is basically a regional carrier, operating in roughly half the states. Aetna and Cigna are in much fewer states and I would be surprised to see either of them make it. World/American Republic are in more states but have such a small market share that it is still impossible to consider them a national carrier.

For all carriers, even high profile ones like Blue, the agent system is the most efficient, least costly way to obtain new business . . . and the carriers know that. The smart ones will find ways to keep the agent in the mix.

I think ALL the carriers want to keep agents in the mix. However, some will have a more difficult time doing so depending on what their current MLR is and if they are a for/non-profit. The carriers that have the best ability to pay higher commissions to agents are the Blues, especially, the non-profits. Unfortunately, they are also the only ones that could afford to cut agents and still bring in direct business.

Since the feds didn't get the public option, they've gone to Plan B -- having all the carriers eventually go out of business till there's just one dominant carrier in each state (most likely a Blue plan). Then these plans will function as the government plan.:mad:
 
For those of you too young to remember and too dumb to care, some of us old farts used to get 50% first year on health deals. And folks paid annual premiums up front because they got 2 months free.

It was quite a whack across the head to drop down to 20.
 
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