Health producers have been pretty vocal about “Obamacare” and how it has affected them. Although I thought I had a pretty good idea of what they were thinking, I wanted to be sure. So, I launched a quick survey to our NOLHA and SIMA agent networks.
I was surprised with some of the results, if not the general tenor of the responses.
One of the biggest surprises, I thought, was that the number of agents selling Individual/Family (IFP) health today is NOT MUCH LESS than prior to the Affordable Care Act. Today, just under half of the Life/Health agents surveyed sell IFP today. A year ago, just over half of Life/Health agents surveyed sold IFP-not much of a decrease (about 13%).
However, the number of policies sold per agent seems to have dropped quite a bit. About 41% of Life/Health agents sell less IFP today than prior to PPACA.
Making Hay while the Sun Shines
About a fourth of agents (27%) are finding ways to take an optimistic view and are rolling with the changes. 5% say their business has skyrocketed because of PPACA, and another 22% say it has improved.
While many HAD originally removed IFP as a product line focus, the launch of the exchanges appears to have brought some agents back to selling health. One agent said, “Thanks to my PPACA marketing, i finished second in total sales for my entire company and each sale has opened the door for more sales of various products in each home.” Indeed, the sale of additional products seems to be critical for agents to be able to make ends meet, with an average of only about $250 per individual led into the exchange. “It’s a real door-opener for me” says one loyal health producer. 38% of agents surveyed act as navigators, helping people into the exchange. The concept of “trusted advisor” has never been more timely, and agents who have been able to broaden their product knowledge/offerings seem to have done better, comparatively.
PPACA has changed the way agents see the health business, of course, causing 25% of agents to do more business online. Further, 20% of agents say they are able to spend less time with each customer, and 19% have stopped selling face to face. “This has really removed the persponal side of selling for me. There just isn’t enough time anymore.” says one agent. Agents have not really changed a great deal about the way they sell however. Only 1 in 5 has changed the way they prospect, and only 10% have focused on improving the efficiency of their business.
Some agents find a way to be on-board with PPACA because they believe it benefits their customers- or themselves personally. “I approve of the ACA and its products, it helps a group of people who don’t otherwise have access to medical coverage” says one agent, and another agent said “As someone with pre-existing medical conditions, I consider PPACA a Godsend”
A Darker View
About half of producers are not happy with Obamacare (47%). 32% of health producers say their business has declined due to PPACA, and another 15% say their business has been utterly crushed.
According to producers, the exchanges have been rough sailing in this first year. Many agents are having a tough time working within the new exchange environment. According to one producer, “ACA has created a mad rush for our agency to keep and maintain our existing business. Having to deal with the exchanges, site glitches has made doing health sales a HUGE pain. Worst of all, if we need to contact the exchange on behalf of our clients they often won’t speak with us without prior authorization which can be difficult to obtain depending on the availability of our clients during the work day.” He concludes, “Obamacare = headaches.”
The relationship between carriers and agents, strained since carriers began to sell direct in the early 2000s, seems to have gotten even more distant. “We have helped carriers get into the direct to consumer space,” says one producer. Another says, “Producers are not welcomed by Health Insurers anymore.”
Agents are quick to present their philosophical views of what PPACA means. One producer writes, “final objective is to have a single payer system or socialized medicine in the United States sooner rather than later. This WILL ultimately put the health insurance agent out of business. Plan well comrades!” One agent laments that he suddenly needs “help finding ways to compete against the government.” Other agents go even further. “It is contrary to the principles of individual liberty upon which this country was founded and upon which it has thrived,” says one agent, and another producer lays it on the line by saying, “It is part of the planned purposeful destruction of our Constitution.” Another agent has the view, “PPACA Helps very few at the expense of many.”
The darkest view of all might be that of helplessness. “25 years in the business,” is one agent, “and I don’t know what to do.”
Agents who used to specialize in IFP have now added an emphasis on Senior Health as well as Life insurance.
“I’m back to selling Life Insurance!” says one producer. Indeed, 38% of agents are focusing more on Life insurance because of PPACA. 32% have chosen to focus more on Senior Health. 21% write more Supplemental Coverage than before.
Regardless of product line switches, some things stay the same- relationships. Only 3% have switched GA/MGA allegiances, and only 14% have switched carrier loyalties. Perhaps due to these relationships, only 14% have supplemented their income outside of the insurance business.
Bottom Line = PPACA Not Good for Most Health Agents
While our stalwart group of health producers have been making the best of things, there is no doubt about the generally negative effects of PPACA from a broker’s perspective.
At first, when the MLR requirements kicked in, commissions were cut in half and advances removed. Many health agents left the business, health-first agencies began to consolidate and diversify, and carriers increased their direct marketing efforts. Recently, with the advent of the exchanges, agents returned to help consumers into the exchange OR to other types of plans. In addition to health, agents have added other types of coverage to their arsenal, but as we’ve seen in the past, many agents are slow to adapt to change – and the problems of the exchanges (and possibly a growing unwillingness of certain carriers to help brokers help consumers) have made things a bit worse.
I believe there IS HOPE for the health insurance broker. Health care is as complicated as ever, and even with the exchanges, the broker can offer needed guidance, and a holistic view of coverage that most consumers still do not fully understand. This won’t happen immediately, and brokers need to step to the plate, accepting the inevitable direction of health coverage. They must increase their efficiencies, improve the effectiveness and reach of their marketing, and most importantly, broaden their view of the full needs of each consumer. They must be seen as the prospect’s trusted advisor not just for one type of product, but for all aspects of their coverage – or even their full financial picture. Some agents will not make this transition, but as with all change, huge opportunities can be created by those with enough energy and determination to carve out a new reality for themselves and for the prospects and customers that depend on them.
I wish you the best, my friends.