Health Reform and Health Insurance Brokers

So I wanted to write an article for our site that is aimed at brokers who keep wondering whats going to happen to them. Many of them are concerned that they will either lose their books of business or maybe they will end up cleaning toilets in an adult bookstore. Either way, the point is that there is more uncertainty in insurance than there is in British dentistry.

For agents that have built large books of renewal income we have been hearing rumors from the agent reps that there is a solid chance that entire books of business will be dis-enrolled and forced to enroll in new plans either with the same carrier or with a different one. On top of this, there is evidence that many of the larger insurance companies are moving to models that won’t include street level health insurance agents. They will still want to do business with larger call centers like us and of course ehealth, but the truth is they are all working on creating direct to consumer portals.

Blue Cross and United have been very busy growing their consumer direct channel and Coventry is also buying leads like crazy from affiliate websites. Blue Cross and Humana are both acquiring retail space like a fishmonger at a fishery. Whats funny is that the rumor is that these retail spaces are losing money like crazy but they keep them open to prepare for health reform. Our Cigna agent rep yesterday recommended that I use some of my retail space (we own a few local auto and home agencies) to be used as health enrollment centers.

There are some good signs though, just not that many. One good thing is that ehealth’s stock price is through the roof. Click on the one year button to see what I am referring to. However, this is good news for me, the owner of a decent size health insurance call center. It doesn’t mean that the road warrior health agent will be able to survive. However even for larger agencies and call centers, there is no guarantee that we will thrive under these new conditions, though it does seem to favor us over the guy that drives around all day to see clients.

The other big rumor right now is level commissions. Meaning that first year commissions are going to go lower but subsequent years might be slightly higher. This leads to the other good news, which is of course no more underwriting. We lose about 40% of our new clients to underwriting now (though Humana is really opening the flood gates, God Bless you Humana!), so that will about double our revenue if we can eliminate this cost of doing business. In the end they might just decrease first year comp and not even raise the next years.

The other bad news is that premiums are going to go through the roof. The mandate is weak so most people will try to avoid paying for health coverage unless they need it. So yes, if our commission remains a percent of premium our revenue will grow, but there will be less customers to make up for the gap.

Really, there are so many rumors and so much speculation that is impossible to predict the industry in 6 months, must less 12-14. What am I doing about health reform for my agents and agency?

I am of course hiding in my closet and eating a tuna sandwich. Of course my closet is quite large and the rest of my house is very tiny so it is logical to do this.

In all seriousness, I have gotten us into property and casualty to eliminate the uncertainty. In fact we are selling lots of auto and home insurance now and I’m real excited about our future in this business. Most of my agents are prepared to flip over to auto and home if our industry goes away, on the other hand, our health business could become three or four times larger. We just don’t know which is worse than wearing no clothes in a mirror factory.


Continue Reading

Great Article

Published on 20 September 2012 by in Health Insurance News & Views

Great Article

Our staff writer has hit on a great topic on our new site which we call the affordable site. It lists the top ten cities to live in based on health insurance premiums. Now certainly she doesn’t recommend moving to a tiny town to save money on health insurance, but maybe you live near one of these cities and didn’t know health insurance was affordable in your city.

Now stop listening to me and read the article; Top Ten Most Affordable Cities for Health Insurance

Continue Reading

Coventry One Plan Changes

Coventry One has some major changes coming to benefit policy holder. Read on friends!

CoventryOne continues to make a significant investment in business improvements and process changes to better serve our members and our brokers. We are pleased to inform you of a number of exciting changes that we will implement in the coming year. Beginning September 24th, we are introducing a number of changes that have been in development for over a year.


You will see overall changes in the location for new business application submissions, improved communication during the underwriting process, enhanced enrollment support, and improved billing and renewal administration. These business improvements and process changes will affect your CoventryOne new business and in-force business as well. Some of the most significant changes include:

  • The ongoing ACH premium draft date will change from the 10th of the month to the 5th of the month (or the following business day if a weekend or holiday).
  • The initial ACH premium draft from a member’s account or credit card will occur immediately following underwriting approval and policy issuance. The initial premium draft will always be for one full month’s premium. Premium adjustments for a partial month’s coverage will be made on the second month’s premium draft. Your new CoventryOne members will receive a welcome letter explaining the draft amounts and dates.
  • We will begin to prorate premiums for partial months of coverage for member and dependent additions and deletions.
  • Active members will have the ability to view up to 16 months of their billing history using My Online ServicesSM from July 2012 going forward.
  • CoventryOne will begin using software certified by the USPS to verify an applicant’s resident county/zip code. If an application is submitted with an incorrect county/zip code that we identify, CoventryOne will contact the applicant by email and the application will be pended in underwriting until the issue is successfully resolved.
  • Through process improvements and automation, we will be able to increase the speed of issuance of member ID cards to 1-3 days from the time of underwriting approval (plus mail time).
  • We are changing our banking relationships so the payment screens and banking screens on the CoventryOne Online Assistant will reflect this change.
  • We will send underwriting offers and both acceptance and decline letters by email directly to new members with a copy to the writing agent. If no email address is provided on the application, these communications will be sent to the member by USPS.
  • We will send renewal letters to members with copies going to the writing agent. Each renewal letter will include up to three lower-cost options.
  • Members will be able to contact a customer service team that will provide live, over-the-phone alternate premium rates when renewing. Any changes will be coordinated with underwriting as necessary.
  • When choosing a lower-cost plan at renewal and when adding new members to existing coverage, we will use the premium rate from the members most recent renewal date to determine the new premium rates.
  • Changes in the family discount due to the addition or deletion of members will be reflected in the billed premium on the billing cycle following the change.

Agents will be more informed on the status of their members, as they will now receive copies of the collections process letters.

Continue Reading

Aetna and the MLR

Published on 05 June 2012 by in Health Insurance News

Aetna and the MLR

The Medical Loss Ratio (MLR) provision of the Affordable Care Act set minimum percentages that health plans must spend on medical costs and quality improvement. On June 1, 2012, insurers filed reports with the federal government detailing where they met the minimum, where they didn’t, and how much they will pay their insured customers in rebates.


We’re pleased with Aetna’s results. Our goal is to price our business so that we deliver the greatest value to our customers, remain competitive in the market and grow our business. The reports we filed with the U.S. Department of Health and Human Services (HHS) demonstrate our ability to price appropriately, even in a year marked by a bad economy and industry-wide, lower-than-expected utilization of medical services.


In this first year of the MLR requirements, Aetna’s rebates represent about 0.5 percent of the premiums we collected. The rebates we are paying are modest, and most policyholders won’t receive a rebate at all.


Where is Aetna paying rebates?

MLRs are calculated for each pool set up by the government. A pool is defined by:

·         The size of the group – Large Group (generally 100+ total employees); Small Group (less than 100 total employees) or Individual

·         The state where the plan’s contract is written

·         Legal entity (for example, Aetna’s HMO and PPO plans are in different legal entities)

Aetna has plans in more than 200 rebate pools nationwide, and we met the MLR requirements in all but 28 of them.


So where will customers receive rebates? We’ve gathered Aetna’s information here for you. You can see the pools that will receive rebates. The rebate amount will vary by policyholder.


What happens next?

By August 1, Aetna is scheduled to send notices to all subscribers and policyholders of plans due a rebate. In most cases, policyholders (plan sponsors) will receive the plan’s rebate. In certain circumstances, the government has directed that the rebate go directly to subscribers of the policyholders (e.g., terminated plans where we cannot locate the policyholders). The amount of the check will depend on the total premiums paid by the customer in 2011. We’ll also include a summary of the government’s guidelines on how group policyholders may use the rebate money.


Does this mean the Minimum MLR provisions are working?

The Minimum MLR rules demonstrate an insurer’s ability to accurately predict medical cost trend and price according to it. However, they do nothing to address rising medical costs. A Commonwealth Fund study that came out just a few weeks ago found that America’s high health care price tag is primarily due to high prices for medication and medical services, as well as a good deal of use of expensive technology. And at least a third of the American population is obese, a condition that drives up health spending.

At the same time, the Institute of Medicine has estimated that waste and inefficiency in health care cost some $750 billion a year.


These are the issues primarily driving the cost of health care premiums. Aetna is focused on addressing them through innovative programs and methods, health information technology, and consumer engagement. We are concerned that the Minimum MLR rules will limit our ability to invest in these initiatives. The rules also unnecessarily increase administrative costs for us and our customers, and could even force insurers out of some markets, reducing competition and limiting choice.


However, we are committed to complying with the law. We are pleased with our ability to price appropriately in this first year of the law, and expect to continue improving our pricing so we can continue to grow our business and avoid future rebates. Our goal is to provide our customers with competitive pricing that reflects medical costs in their markets.

Continue Reading

Women’s preventive health benefits

This article affects individual health insurance policies.
Women’s preventive health benefits
New changes effective on August 1, 2012
As you may know, the Affordable Care Act (ACA, or Health Care Reform law) includes changes that are being phased in over a number of years. The latest set of changes includes additional benefits for certain Women’s Preventive Health Services. When plans renew or are effective on or after August 1, 2012, all of the following women’s health services will be considered preventive (some were already covered). These services generally will be covered at no cost share, when provided in-network:
•    Well-woman visits (annually and now including prenatal visits)
•    Screening for gestational diabetes
•    Human papillomavirus (HPV) DNA testing
•    Counseling for sexually transmitted infections
•    Counseling and screening for human immunodeficiency virus (HIV)
•    Screening and counseling for interpersonal and domestic violence
•    Breastfeeding support, supplies and counseling
•    Generic formulary contraceptives, certain brand formulary contraceptives, and FDA-approved, over-the-counter female contraceptives with prescription are covered without member cost share (for example, no copayment). Certain religious organizations or religious employers may be exempt from offering contraceptive services.


Continue Reading

HHS Issues Final Rules on MLR Notices for Those Not Receiving Rebates

On May 11, 2012, the Department of Health and Human Services (HHS) issued final rules on the Medical Loss Ratio (MLR) rebate notices for policyholders and subscribers who are not receiving rebates. Insurance companies and HMOs will not be required to communicate their specific MLR percent to those who are not receiving rebates.

Instead, they must issue a new notice that says they have met or exceeded the minimum MLR standard. Policyholders and individuals who receive these notices will be directed to www.HealthCare.gov for information about their insurer’s actual MLR. The notice to those not receiving rebates is required only for the 2011 rebates that will be issued in 2012.

The purpose of sending it this year is to help educate consumers about MLR and direct them to the www.HealthCare.gov website for MLR information. The notice must be provided with the first plan document (for example, open enrollment material) that is provided to enrollees on or after July 1, 2012. It may also be provided electronically.

This notice is not required for expatriate or mini-med policies where no rebate is due. In addition, for groups of policies with fewer than 1,000 participants where there is not enough credible data to determine if the MLR standard has been met, this notice is not required.

Continue Reading

United Health Ones New Deductible Benefit

Deductible Credit is a feature offered on UnitedHealthOneSM renewable plans that can help you save money.1

Here’s how it works: If you do not meet your in-network calendar-year deductible, you can receive a credit of 20% on the following year’s deductible. If this happens two years in a row, you can receive a 40% credit. And if you don’t meet the in-network calendar-year deductible three years in a row, your deductible responsibility can be cut in half – 50%!2 You can save money with your United policy year-after-year.

Applications with effective date July 1, 2012 or earlier may be eligible for 2013 Deductible Credit! UnitedHealthOneSMDeductible Credit can give you an edge over your competition

The Deductible Credit Calculator: See It & Believe It!

The Deductible Credit Calculator shows you the potential savings with a UnitedHealthOneSM plan featuring Deductible Credit.1

Simply plug in your  health plan and deductible amount, and the Deductible Credit Calculator will demonstrate how UnitedHealthOneSM Deductible Credit can cut your client’s in-network calendar year deductible responsibility up to 50%!2

See for yourself how Deductible Credit can save you  money – Check out the Deductible Credit Calculator now! .


Continue Reading


Imagine a doctor’s appointment without the commute, or the waiting rooms with strange smells, forced to peruse magazines you would never typically pick up just to ignore your surroundings. The living room sofa, your local drugstore, or the coffee shop are the potential faces of the new waiting room. With the capabilities of telemedicine, the virtual realm has extended itself to online doctor visits, providing the high-speed pace of service we come to expect in this age. We also can miraculously find better prices on everything we need online, so why not skip the PCP, or in-store clinic, and go straight to the first available board-certified physician? The convenience and the price sound unbeatable, but there are several factors that may not make it such a perfect operation.

Several things are compromised in this situation: the patient’s security, the health care system’s security, and the welfare of the medical field. A virtual doctor is not the same as having a personalized visit, someone peering inside your ear canal, inspecting the problem. Listening to a patient’s description and trusting their words is a cheap, easy road to manipulation of the system. How much abuse does the medical system already experience? Telemedicine could create an increase in this mistreatment for personal and ultimately illegal benefit. Also, what about people who have dedicated their lives to helping people (in person)? Sure, a $45, 10-minute visit is appealing, but in the long run, you are short changing yourself and others. Doctor’s salaries have already seen significant cuts in the past few years, and this virtual “solution” could lead to hard-earned degrees, and decades of valuable medical experience going to waste.

There is little trust that can be had over any internet transaction. Though board certifications are present, these doctors are still not examining your symptoms with their own eyes and ears. Pixels and sound waves, however HD the quality, are not medical devices. As for the patient’s information, there should hopefully be a secure application process, as sometimes efficiency can take precedence over security. People may be so eager to receive quick, affordable health care that they do not realize who is collecting their information. UnitedHealth Group is surely reputable, but there is always the possibility of information selling and interception.

In short, keep doctors in business; they might still be paying back loans for med school, and have families to insure themselves. Also, help in the effort to minimize manipulation of the health care system. Many people seem to get away with lying to doctors in person, imagine the possibilities when it’s buffered by thousands of miles and an LCD screen.

Continue Reading

Why We Spend So Much

It should come as no great surprise that United States leads all other nations in spending on health care.  It might come as a surprise that the level of care received in the United States is not better.

This information is what led the Massachusetts government to not allow is health care facilities to charge premiums for health care because of more effective care.  The reason why is because there is no such thing.  Not one of these health care providers or facilities could claim their premium level of care had any better results than the least expensive providers.

The U.S. spent $8,000 per person in 2009 for health care services.  The two nations (Norway and Switzerland) that came in second and third were at a little more than $5,000 per person.

So what is the difference between the $8k and the 5K?  Its not more services if that is what you are thinking.  In fact, the US came in near the bottom for total number of doctor consultations. Nor is it longer hospital stays.  The U.S. had shorter hospital stays than most countries.  So in other words, utilization is way lower in the U.S. and results are no better.

The latest study of health care costs was undertaken by the Commonwealth Fund who points to the high costs of medication and medical services in the U.S. that is causing these excessive differences.  Additionally, there is more use of MRIs and CT scans which are very expensive in any country.

Who else is to Blame?  As most of us know, 1/3 of our country is obese and that is a major driver of health care costs.

Back to the standard of care, there is no better results here and life spans are definitely lower in our country.  On the bright side, we have excellent cancer survival rates.  But chronic conditions are the death of us (no pun intended).  Diabetes, asthma, and other chronic conditions bring our results way down.

Countries like Japan, use strong price regulations to control medical costs.  Health care spending has increased only 2 percentage points in two decades.  However, Japan has suffered from chronic stagflation issues.

The best course of advice that our medical field could follow now is to focus on improving lifestyle choices in this country including diet, smoking, and exercise.

If you were expecting a health insurance related cause for this excessive health care cost, I can assure you it was not cited anywhere.  Thus in battling health reform, to blame health insurance companies will not solve our problems.  (Though many suspect doing away with them would help).

Continue Reading


Published on 19 April 2012 by in Health Insurance Education


A Proposed Rule Could Make Millions Ineligible For Health Insurance Subsidies
by Erik Berman

A major issue in the workplace today is the U.S. Government’s Health Care Insurance subsidy proposal to allow low to moderate income employees to opt out of their employer’s health insurance coverage and instead get federal subsidies to buy insurance through new state-based marketplaces, called “exchanges.”

A health insurance exchange is an exchange run by a private sector company or nonprofit.  They
are designed to help consumers find plans personalized to their specific health conditions, preferred doctor/hospital networks, and budget. These exchanges are sometimes called marketplaces or intermediaries, and work directly with insurance carriers, effectively acting as an extension of the carrier.

President Obama promoted the concept of a health insurance exchange as a key component of his health reform initiative. Obama said that it should be “…a market where Americans can one-stop shop for a health care plan, compare benefits and prices, and choose the plan that’s best for them, in the same way that Members of Congress and their families can.

There is a debate going on right now over who actually qualifies for subsidies and whether or not the government has the authority to force most people to buy health insurance. It’s up to the Supreme Court to resolve how tax credits will be used to subsidize coverage and how many people will qualify.

A proposed Treasury Department rule says workers and their families cannot qualify for those subsidies unless their employer’s health plan is unaffordable because it exceeds 9.5 percent of their household income. There is a legal battle going on right now between Democrats and Republicans about the U.S. Government’s proposed mandate to force people to buy health insurance and to possibly allow tax credit subsidies for low –moderate income employees. Most people agree that health insurance should be available to everyone at reasonable rates and the U.S. Government should not be able to force you to buy it, especially if you cannot afford it.

Continue Reading