Those of us who make our livings in the group health market space wonder from time to time what are the real existential threats to our livelihood, we ponder the wild machinations coming out of the White House, the ineptitude of our elected legislators and, if like me, you live in California, only the Providence itself knows what Sacramento will hatch next.
My career has been largely made up of anticipating change and adjusting my professional focus on taking advantage of the, as yet unknown. My clients are bright and successful professionals who make it a point to understand or align themselves with someone who understands the anticipated and unanticipated consequences of industry change. The last best example was The Affordable Care Act. We worked with hundreds of brokers on complying with and taking advantage of ACA. I can report that almost every solution that we recommended (some were very controversial at the time) remains in place today.
What Can We Expect Next?
Just like with the ACA, almost any forthcoming change in State or Federal law will result in two reactions 1) Immediate employer/agent panic and uncertainty and 2) Huge new opportunities emerging for those who embrace change and see the collective industry glass as half full. Naturally, as an industry consultant to health agents/brokers, chaos is generally my friend. Not that I wish uncertainty and stress on anyone, but as a brazen and unapologetic plug for my business, I want you to know I am here and I am a strong believer in point #2 above (opportunity is created by change)
As to which change to expect, I believe that certain states (before the Feds) will take the lead in reforming the federal health care reform law (ACA) and these changes will likely reflect something like a European public/private “universal coverage model”.
What is a Universal Coverage Model?
To some, this equates to a Single Payer or centralized and managed guarantee of free coverage for all. Others think it is Medicare for All. I believe the actual direction is more akin to what certain European countries have adopted (and are moving collectively in greater numbers towards) which is a public/private partnership with the government providing the guarantee of catastrophic umbrella coverage and the private sector competing for the base or underlying coverage. The closest model to this in the US is Medicare and how it coordinates with private supplemental plans that compete for different levels of coverage depending on what the individual is willing to pay. I believe companies who currently provide limited medical coverage (so called skinny options) like Pan American Life, will have a built in advantage in this type of market.
Much confusion exists (yes, this is a good thing for the insurance consulting industry) and will only increase geometrically with each proposal and certainly with each (locally driven) unique version unleashed on the future markets.
Who is Most Affected By Change?
It is my personal belief that the commercial employer sector most impacted by recent and expected changes will be the service sector, employing predominately low wage immigrant work forces. This is why it is extremely important that industry lobbyists are successful in protecting agent commissions. The viability of group health insurance impacts the employer’s bottom line as much or more than almost any other HR decision. It is the wrong time to start looking at broker/agent compensation as a target to lower administrative costs