There are drastic changes coming our way in the health insurance arena. Some may jump to say ‘the insurance companies are over reacting. They will get all this new business they didn’t have’. Some of this could be true… but read on.
Explosion! That’s the best way I can describe it. Within 45 days of the health care reform bill being signed some of the carriers have decided to leave the market. I know at least one of them filed bankruptcy, and they are an ‘A’ Rated carrier. In case you didn’t know, most of the big branded health insurance companies we all know of are in the ‘A’ Ratings. This is some scary stuff folks. Unfortunately, the dust is still settling but there is still more to come.
Carriers are telling us change is coming due to the health care reform bill but are leaving us half in the dark. A few carriers have already increased the premiums to help offset future changes that will occur. The changes coming out will all happen at one time due to deadlines imposed by the bill, but the question is how the carrier will handle the change. It’s almost like a game of poker and we know the house will win. Heck, the carriers have already started to shave some of the commission away from the agent and we still have to do the same work. Actually, it will be more work for less. Unfortunately, more commissions will be cut with the new changes.
We are moving in unchartered waters for most of the states. There is one state that is currently going down this road. It is the state of Massachusetts. Some say that it has really great coverage due to the mandates imposed by the state, similarly to the healthcare reform bill. They house 4 of the top 12 health plans in the country as ranked by U.S. News and World Report. All 4 of those health plans are non-profits that spend more than 88% of the premiums on health care expenses. Three of the four carriers posted significant operating losses totaling just under $200 million collectively. That’s a lot of dough.
One other interesting thing I want to point out - According to an industry trade article in InsuranceNews.net, the health care law in Mass. decreased access to care and increased wasteful spending. ObamaCare was designed almost identical to MassCare. I don’t know about you, but the health care reform I was looking for didn’t force limited access while driving the cost up. It seems the true goal was lost in the shuffle.
Butch Zemar
Elite Benefits of America