Archive for April, 2012

Let’s Prepare Now for Healthcare Reform Decisions

April 30, 2012

Is it time to discuss Repeal and Replace?

In the next six weeks, the discussions will once again return to the Supreme Court’s decision on PPACA.  Therefore, we need to prepare now for what our industry’s realistic and common sense approach to SCOTUS’ decision can be.  If the law is upheld we must go one direction but if it is struck down in all or in part then we must go another.  Currently the media is focused on the GSA and Secret Service scandals; and therefore not giving healthcare much attention, but that will change.

Therefore let’s focus on “repeal & replace” for a moment, since that is the Republican motto, for now.  One way or another during this coming summer and fall, we will need to address “repeal & replace” so let’s assume we must replace the law because the citizens will not stand for the status quo.

Here are 10 ideas to include in a bill to repeal and replace:

  1. Make health insurance premium tax deductible for anyone who pays it.
  2. Make all Fully-Insured plans Guarantee Issue to 1 EE Business with a reasonable Pre-ex period.  Pre-ex period 6 months.
  3. Allow Carriers a reasonable corridor for Risk Adjustment Factors (30%).
  4. Tort reform: Loser Pays or Fixed Attorneys at 15%.
  5. Allow carriers and plans to sell across state lines.
  6. No new benefit mandates for 5 years.
  7. HRAs and MERPs to be permissible and available to implement on all plans.
  8. All providers and insurers to publish outcome statistics and experience data.
  9. Universal Enrollment forms for Employer/Employees, Individuals/Families.
  10. Health plan commission set at level 7% and does not increase as premium does.

I also think wellness, pooling for individuals and families, and a traditional approach to underwriting will be important.  Certainly, if we want to bend the cost curve downward we must address behavior and expectations through real wellness and benefit structure.

I will expand on these ideas over the coming months but let’s make no mistake; the issue is access and affordability.  The industry and those of us who make our living in it must drive this discussion.  We can not sit back to let any Congress, Republican or Democrat, develop the solutions because that will provide no solutions.

I suggest that every carrier executive involved in plan design and pricing go to the field and meet with small employers.  Just a few conversations will make it clear that employers are willing to provide their health plans in new and better ways if someone will just show them how.

We need to show them how.  More about that later.

Some may think that I am premature in discussing this matter or that it will never come to pass.  Well, that is what we, as an industry, did from 2002-2009 and look what happened.

This time, let’s plan to be ready!

Let me know what you think and give me your ideas to improve my Basic 10.

Don’t be fooled

April 2, 2012

First of all I want to declare that this is not a commercial for any particular carrier or health plan.  This is simply an observation made over the past 6 months taken from dozens of meetings with employers both small and large.  But the information below may be critical to your growth or your survival.

I want to talk about sales opportunities in the small group medical market.

I realize that as you read this, SCOTUS is listening to arguments concerning the constitutionality of PPACA.  I also realize that the standard thinking of the day is that rates have flattened out so employer’s rate increases have leveled out so no one wants to move their health plan.  But, let me assure you that I understand all that and that I have not lost my mind.  Here’s why……..

Let’s review the facts.  Employers have just lived through 7 years of double digit rate increases that were only slightly mitigated by benefit decreases.  Any rate increase, even 1%, is an increase to an already bulging rate so there lies the first opportunity!!!

Incumbent brokers are feeling relief, after 7 years of delivering double digit increases, and are telling employers that finally their rates have stopped increasing and so this year we can leave the plan alone.  Brokers of Record, everywhere, are consulting with their clients and telling the employer that this year the employer can just stay put.  There lies the second opportunity!!!

No one should assume that any employer is currently satisfied with the cost or the benefits of their existing health plan.  Whether the employer expresses this dissatisfaction or not one should assume that the employer is just waiting for a better idea for a health plan and in the back of their mind they know that one exists.

So, in walks a prospecting broker, hungry for new business and armed with Employer Driven Benefit Plans.  This prospecting broker shows the dissatisfied employer that there is another way to finance their group health plan.

The prospecting broker explains to the employer that 50-70% of the employer’s employees hardly use the plan, if at all, so if the employer installs an Employer Driven Plan the employer can lower its premium and only pay for claims if they are incurred.  The prospecting broker just became the incumbent!

Even if the employer does not enroll in this newly discovered Employer Driven Plan the employer will be impressed with the prospecting broker.  So the employer will ask “Why didn’t my current broker show me this plan?”

If an employer asks that question then the employer will surely sign a BOR.

So, the point is that just because the market appears to be flat do not be fooled by it.  Employers are fed up with the status quo; Employers are willing to finance their health plan in a new way if someone just shows them how.

Shouldn’t you be the broker to show them how?

As I stated upfront, this is not a commercial for EDHPs.  Sell what you want but the advice is this; do not be fooled into thinking employers will not change plans during 2012.  This could be a prospecting broker’s biggest year yet!