Selling Outside the Exchanges

insurehound

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Just curious what your thoughts were on agents being able to sell and make a living outside of the new Exchanges? Will there even be carriers even in that business? Will a very Liberal and Business-unfriendly State like mine(California) even allow that to happen?

I have seen some articles discussing how the market outside of the Exchangeswill be strong, especially with small group. I have doubts. Why would a carrier run two different product lines (inside and outside of the exchange) when they are faced with most of the same regulatory requirements? How would they make money? I also have read that States will have a lot of control on what the market will look like outside the exchange. In California, that would probably not look too good for the private market.

I’m just trying to see if there's hope for brokers like me in the small group arena. I don't see it. Especially when two big entities like the Government and the Health Insurance Companies want to get rid of you.

[FONT=Calibri","sans-serif]BTW, our office spent most of the morningstraightening out a claim problem for one of clients. Yeah, we're not needed.I'm sure a Navigator would have done the same (sarcasm).[/FONT]
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Couple of Articles:

Remember the People Outside of the Exchanges - Kaiser Health Reform

Inability to Disarm Exchange ‘Assassin’ May Leave Exchanges With Costly Enrollees (with Chart: Adverse Selection Tops Insurers’ Exchange Concerns) | AIS Health
 
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I would also like to know the same thing. Will there be a market for IFP. Will they pay commissions.

In 2014 will they stop paying us our renewals is a big question I would like discussed.

I would like to hear what Somarco and Taterpeeler think.

I am attaching a PDF of an article about how the exchanges will not happen that I posted in another section
 

Attachments

  • A State Revolt Against ObamaCare Emerges.pdf
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I would like to hear from the California legend, Dave Fluker :)

It's always good to get opinions but sadly I think the only way we will know for sure is to wait till mid or late 2013. I expect that the insurance industry and the carriers will leave us hanging until the very last moment.
 
Carriers will pay renewals on in force business. Question is, how many of those plans will become unaffordable and/or be dropped?

If HHS tells the carriers to bring all non-grandfathered IFP in to compliance (including 2014 rate structure) you can kiss your renewals goodbye.

As for major medical insurance outside the exchange, there is nothing definitive from HHS as far as I know.

Since HHS has absolute authority over all provisions of Obamacare, unless you can predict the future there is no way to know what can be offered outside of the exchanges.
 
At least in California I think small group might be viable under PPACA (or KaliforniaKare) both inside and outside of the SHOP exchange. The two problems are compensation levels and durability of small groups.

SHOP in CA will probably look a lot like PacAdvantage (HIPC) did, forcing carriers to offer very low rates for groups and compensation either PMPM or a % (I'd guess PMPM).

The bigger problem with small group will be the viability of offering coverage versus the individual exchange with potential subsidies. Employers will have to decide how much they want to lay out for a benefits plan every month. At issue is the loss of subsidy to dependents who refuse to enroll in the employer plan. Unless the employer is willing to pay a portion of dependent costs to equalize the potential subsidy loss to the employee's family from the individual exchange, dependents are going to get screwed into having to buy the over-priced employer benefits.

Individual, who knows. With subsidy levels in CA as high as $92,000 for a family, many people will buy in the individual exchange to get the subsidy credit. I have heard that some agents in CA are planning to send all adverse to the exchange to try and collapse it. Not sure if this would work since they can just print more trillions in DC (see CA PCIP). Agent comp on IFP is still unknown and likely won't be known until late 2013. At that point, like MLR, carriers will be scrambling to be the last to announce so as not to let another carrier undercut them by offering slightly higher comp.

IFP Exchange in CA = HIPAA/MRMIP/PCIP/Healthy Familes/Medi-Cal and comp will be accordingly.

Even if premiums are high, I think 2-3% on IFP exchange business (and I hope I am wrong). Also, carriers in CA can't comp higher outside of the exchange than inside (the risk pool and adverse selection concerns) so unless a carrier wants to comp nicely on the equlivalent of millions of HIPAA cases, it's going to be low.

Small group, if sustainable, probably has a better comp opportunity. HIPC/PacAdvantage did pay comp in line with the private markets before it went belly up.

My main concern with IFP is the lack of significant penalty (tax, whatever they are calling it today) to force healthy people currently uninsured to participate. The carrriers know that there will be a mad rush of HIPAA-like people into the exchanges to get the GI coverage. Absent a strong financial incentive, there will be no mad rush of healthy people to suddenly "come to Jesus" and buy a health plan.

Funny, seniors on Medicare who fail to elect timely Part B can be stuck waiting out obtaining Part B for over a year. I wonder if anyone under 65 in CA will be forced to wait out to the next open enrollment period or if they will do like kid GI in CA now and impose an elevated premium for late enrollment? If so, that would create a further incentive for healthy people to game the system and only pay high premiums when they really need significant medical services.

Just my opinion. We won't likely know much until later in 2013.
 
According to this Will You Have To Get Health Insurance By 2014? | MyHealthCafe.com chart, ALL policies sold in 2014 will have to be at least "Bronze" level plans, in order to avoid the penalty-tax.

Until recently, I thought that only exchange-based policies had to adhere to the Bronze, Silver, Gold level. Now I see that EVERY policy sold in America must be at that level to avoid the penalty-tax. (A Penalty-Tax that increases in severity each year, btw)

I interpret this to mean that our clients can keep their current plans, but if they don't meet at least the Bronze level, the tax-penalty fee will have to be paid to the IRS each year. Sure, Obama said that "You can Keep Your Plan.." but he didn't mention that your family will pay a tax-penalty for doing so if it's not compliant with the ACA.

This link is to an actual "Bronze" level plan in the state of Massachuttes. It's expected that the Federal Government's benefit requirement will be very similar...
Commonwealth Choice Bronze High Benefits « Celticare Health Plan

Individual Deductible $250 and 35% coinsurance to a maximum annual OOP of $5,000 per year. No wonder even the lowly Bronze level is expensive.
-ac
 
According to this Will You Have To Get Health Insurance By 2014? | MyHealthCafe.com chart, ALL policies sold in 2014 will have to be at least "Bronze" level plans, in order to avoid the penalty-tax.

Does that come from an HHS reg?

If not, it is just speculation.

HHS has the final word.

I interpret this to mean that our clients can keep their current plans, but if they don't meet at least the Bronze level, the tax-penalty fee will have to be paid to the IRS each year.

I had a similar conversation with some carriers a few weeks ago. Their response was, we are waiting on HHS regs.

Good advice.

Who knew that Obamacare could make the Catholic church and their entities pay for "free" contraceptives?

HHS knew.
 
According to the current information, California will require all IFP plans sold in or out of the exchange to be the four "precious metals" plans plus the cat plan. Also, carriers won't be able to price lower outside of the individual exchange on those plans.

The option to standardize in CA has not been determined yet, so we may also get standardized plans (like Medicare Supplements) for the Platinum, Gold, Silver, Bronze and Cat plans.

Cat plan will only be available to people under 30.
 
My understanding of PPACA was that all non-grandfathered plans must have the actuarial value of the precious metal plans, whether sold inside or outside the exchange. According to AZ's largest insurer for IFP plans (BCBSAZ), 80% of their plan designs don't meet the actuarial value of the bronze plan. Price shocker coming...
 
For CA agents, this Exchange document spells it out

http://www.healthexchange.ca.gov/St...OptionsRecommendationsandWorkPlan_6-26-12.pdf

Agents will be under the "Assister" bucket and will need to be affiliated with an enrollment entity which will be the insurance carriers.
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For CA agents, July 19 Ca HBEX will rule on method of agent comp and whether or not they will require parity in and out.
 
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