Shortly after the Affordable Care Act was signed into law, insurance carriers across the nation, particularly in the individual market, slashed the commissions they pay to agents and brokers.

This was due, in part, to the minimum Medical Loss Ratio requirement that went into effect in 2011. Because carriers are required to spend 80% of collected premium dollars on claims, they must be careful with the remaining 20%; they can no longer afford to pay 10% or more to agents.

There was, however, another reason. Carriers seemed to buy in to the idea that the ACA policies would sell themselves. After all, the government promised carriers up to 30 million new customers; and they were designing a self-service website that insurance shoppers could use to purchase coverage, without the help of an insurance advisor.

Agents learned to maximize their time

Realizing that they had to become more efficient if they wanted to make a living as a broker, agents began to ask themselves how they could leverage technology to sell the number of policies needed to earn a good living, during the short open enrollment period each year. “Private Exchange” solutions began to pop up, and advisors invested thousands of dollars so they could put their business on “autopilot” and sign people up for ACA plans without actually being there to offer advice. With so many prospects, all they had to do was take the orders; selling the plans wasn’t necessary.

And it worked. In the ACA’s first open enrollment period, many agents were successful. While some brokers worried that they wouldn’t survive, others saw the opportunity and grew their business exponentially.

But now…

Fast forward a couple years and we find ourselves facing the ACA’s fourth annual open enrollment period. Most people who want coverage already have it, and some of those who have signed up through the Federal and State Marketplaces seem to have changed their minds about the coverage they need. According to CMS, the 2016 open enrollment period ended, “with about 12.7 million plan selections through the Health Insurance Marketplaces,” and that number only represents about a nine percent increase from the same time the prior year. 

In year one, the Federal Website was broken (and so were many of the state websites), but the government still exceeded its sales goals. Since that time, while many of the insurance websites have improved dramatically, sales have slowed. Whatever policies were going to sell themselves have already done so. With rising premiums, rising out-of-pocket costs, and shrinking provider networks, there’s a question about whether those who have signed up for coverage will stay enrolled in the plans they have.

No More Order Taking, Time to be a Salesperson

It’s fair to say, for the 2017 open enrollment period, agents can no longer sit back and take orders; they have to go out and make some sales. So how do you do that? How do you sell coverage to people who; either don’t see the need, or who believe that the available policies are watered down and overpriced?

The answer − you have to find a way to increase the value of the plans while keeping the premium affordable. In other words, you have to give people more for their money. You need to offer your clients better coverage for less. May sound easier said than done.

You may think; if your clients are unhappy with their silver-level options, for instance, you can:

• Upgrade them to a gold plan, which will provide better coverage but at a heftier price tag
• Downgrade them to a bronze plan, which will save premium dollars but could bankrupt them if they have a big claim

Neither offers a solution, only a tradeoff between coverage and premium.

Here’s how we think you should do it

Don’t despair—there is an answer. What you need to do is sell more than just major medical insurance.

For example, a client who wants to reduce their out-of-pocket exposure, but concerned about the cost of a gold-level plan could instead purchase a lower-cost bronze plan and use the premium savings to buy accident and critical illness coverage. The supplemental coverage helps gap the out-of-pocket costs from the higher deductible option in the event of accidents and critical illness diagnosis’s.  You client could also use the telehealth benefit offered with some plans to access doctors by phone and get certain prescriptions filled, saving on office visit costs,  or they could use some of the premium savings to add to their Health Savings Account. 

The trick to the multi-product approach is to present it as one complete solution, not a long list of options that the client needs to make a decision about. To learn more about some of the products you can pair with a major medical health plan, to offer more coverage and financial protection for your clients, contact AHCP today.