How To Maximize Your Health Business Potential In These Daunting Times

    The old Chinese proverb “may you live in interesting times” has never seemed more relevant to health insurance brokers than it does today. Changes in society, changes in government regulations, and changes in the delivery of health care itself are all converging to make the balance of this year and the prospects for 2014 most daunting indeed.

    With the Affordable Care Act (ACA) ready to swing into full implementation and employer’s health care costs continuing to skyrocket, it is now more important than ever for brokers to stay a step ahead of emerging trends and have the knowledge and perspective needed to deal with the curves that the market may throw their way.

    While nobody has a crystal ball, the time has never been better to consider health insurance trends, to reflect on what consumers and employers will be looking for in a health insurance solution, and to suggest how brokers can maximize their business potential and play an ever-increasing role in helping their clients find the right insurance option that meets their needs and budget.

    Here are nine things to watch for as we move into the second half of 2013.

     1. Health Insurance Exchanges. We are only months away from the federal mandate (as part of the ACA) that requires all states to establish and run their own health insurance exchanges by January 1, 2014-or default to a federal fallback program (as many states are choosing to do). These exchanges create an online, one-stop shopping mall where employers, consumers, insurance brokers, and others can easily view competing health plans side by side, comparing benefits, costs, provider networks, and other features. Online businesses such as these are able to thrive in these sectors by making sure they meet their customer’s and consumers’ needs, including making sure that when they buy online they are cared for. This can be made possible by businesses checking out a great article and review on credit card processing companies, by Merchant Alternatives. so they can create easier and adaptable payment processing for when it is required.

    Exchanges are designed to provide small employers the same advantages commonly available to larger groups by organizing the private insurance market in ways that create a more stable risk pool, greater purchasing power, and more competition among insurers when it comes to price, quality, and service.

    Along with the public exchanges there are also private exchanges that operate under the same basic principles but which contain some significant differences relative to the use of licensed agents; the administration of COBRA, PPO, flexible benefits, etc.; and the degree of field sales and enrollment support offered.

    Another difference is that as of 2014 only the state and federal exchanges will be able to offer tax credits. All of this is new to most employers and individuals-and new to many brokers as well-and this provides a wonderful opportunity for brokers to position themselves as a trusted advisor to help their clients in these changing times.

     2. More Part-Time Employees. The same ACA that mandates the creation of state-sponsored health insurance exchanges also requires employers exceeding a given size to offer health coverage to all full-time employees. As employers look for creative ways to control their costs while complying with the law, we are already beginning to see a boost in the number of part-time positions. As this happens, it could start a trend that chips away at employer-sponsored health coverage, which has been a pillar of America’s health system since post-World War II.

    However, part-time employees need health coverage, too-even if not covered by their employers. The resulting dynamics may open up new, previously untapped markets for America’s brokers who need to bring to these individuals products that meet their needs and budgets.

     3. More Employee Cost Sharing. In 2012 employees contributed 42 percent more for health care than they did five years before, compared to a 32 percent increase for employers. In the coming years, more than 80 percent of the employers who responded to a recent Towers Watson survey plan to raise even further the share of premiums paid by employees. That includes rethinking their subsidy strategy for dependents. Employers expect average total health care costs for active employees to reach $12,136 per year in 2013-up 5.1 percent from 2012. That’s the lowest cost increase in 15 years, according to the Towers Watson survey (Towers Watson/National Business Group on Health Survey on Purchasing Value in Health Care, March 2013).

    Total employee cost share, including premiums and out-of-pocket costs, has climbed from 34 percent in 2011 to 37 percent in 2013. Subsidies for retiree medical coverage have declined, too, with only 15 percent of companies offering them to newly hired employees. Brokers should keep their eye on this trend and be prepared to respond accordingly.

     4. Employer-Sponsored Wellness Ser­vices. As health care costs continue to rise, employee wellness programs are gaining in popularity as part of a complete health benefits package. Employees feel valued when there are extended perks such as in-office vaccinations, online/telephonic health coaching and discounted gym memberships. In turn, employers reap the benefits of a healthier, less absent and more positive work force.

    These are not your father’s wellness programs. Employers are (and will continue) introducing mobile apps, prevention-focused games, social-media communities and other strategies-all designed to encourage and reward healthy lifestyles among their employees. As a result, insurance carriers and wellness providers are adapting their health benefit portfolios to reflect this new want.

    Brokers need to be mindful of this trend and bring creative ideas to the table to help their employer/clients design the next generation of wellness programs as part of their health benefits packages for 2014.

     5. Rise in Ancillary Benefits. As core health insurance products become more highly regulated, health insurers and brokers are investing in other benefits such as dental and vision. Selling such products has the potential to contribute more than ever to a broker’s bottom line.

    Brokers will need to find the right partners through which they can offer these products and adjust their portfolios accordingly. Some provide access to dental, vision, chiropractic and life carriers, all in one program, while allowing employers (with their broker’s guidance) to pick and choose the benefits they like best and build a program from a cafeteria-style menu that makes sense for their business, budget and employees.

    Whether already offering optional benefits or looking to add them for the first time, brokers looking for new revenue streams should consider the potential of ancillary benefits.

     6. The Aging of America. Every eight seconds someone in America is aging into Medicare. In 2010, Americans 65 years or older numbered 40.3 million-the largest number of seniors since the Census Bureau began keeping records more than a century ago. By 2030 there will be about 72 million older Americans-more than twice their number in 2000.

    Seniors approach buying health insurance with a different mindset than when they were younger. To the commercial population, buying health insurance is akin to buying auto or home insurance-anticipating the unexpected and being prepared. However, seniors know that they are likely to consume health care resources with greater frequency than their younger counterparts and, as a result, the decision of which insurance to purchase is of heightened significance to them. They recognize the importance of making shrewd decisions that will allow them to not worry about their health care needs while protecting their financial assets and those of their loved ones.

    There has never been a better time for health insurance brokers to explore the vast opportunities awaiting them with the Medicare population. Brokers can help seniors through this process by providing them and their adult children or caregivers the information and recommendations Medicare recipients need to make well-informed decisions. Even brokers who have never sold Medicare before can no longer ignore this flourishing and influential market.

     7. Insuring Younger Adults. Under the current underwriting standard, older consumers are charged about five times more than young adults. Even though these rate bands were narrowed under the ACA, the premiums for younger Americans are still expected to rise dramatically in 2014, with some predicting that younger individuals can expect a 30 to 40 percent increase in what they pay for health insurance. That cost includes premiums, deductibles and co-payments. Brokers will need to have a contemporary strategy in place to sell affordable health insurance to this demographic.

     8. Consumer Involvement. We live in a society in which access to information has increased consumer involvement in all purchasing decisions. People shop online with growing frequency for everything from cars to clothes to vacation destinations. Health insurance is no different.

    While individuals and small businesses will still rely on brokers to provide unbiased counsel and recommendations, consumers more than ever want easy 24/7 access to information that will help them make intelligent choices. To meet that need, brokers should have at their disposal dynamic search engines that allow them and their clients to view all of their health insurance options side by side and go through a simple needs assessment that narrows down hundreds of plans through criteria that are specific to them-such as what medications are covered, cost of co-payment, and provider network.

     9. Changes to Health Insurance Offer­ings. Just 2 percent of health plans available to consumers in the private insurance market currently offer all the coverage that will become mandatory next year under the health care overhaul, according to HealthPocket Inc. (a Sunnyvale, CA, technology firm that compares and ranks health plans). That mans that only about one in 50 plans is now in compliance with the main requirements of ACA.

    The HealthPocket Inc. analysis found that basic benefits, including doctor visits, emergency room care, hospitalizations and lab tests, were standard offerings for nearly all the 11,000 plans in the study. But only one in four offered pediatric care and only 8 percent covered dental checkups for children. About one-third covered maternity and newborn care, and just over half covered services to deal with substance abuse. These and other coverage areas are considered “essential health benefits” under the health care law. All health insurance plans in the individual and small-business market must offer them beginning next year.

    Anytime you add benefits to a policy, it adds to the cost of health care coverage. That means it’s time for brokers to brush up on which health plans they are offering and what their benefit package and pricing structure will look like in 2014.

    These realities and many others bring us back to the notion of living “in interesting times.” Some believe this is more a curse than it is a proverb. But that need not be the case.

    Now is the time for brokers to seize these times and make them not only interesting but invigorating and profitable as well.

    CHOICE Administrators

    is president and CEO of CHOICE Administrators, a developer and administrator of health insurance exchanges. He has been an architect in the creation and acceptance of individual employee-choice health insurance exchanges and is currently responsible for a series of health programs, including the CaliforniaChoice program.A 30-year veteran of the health insurance industry, Goldstein began his career in 1981 with John Hancock Insurance, where he rapidly ascended to a leadership role focused on the medical disability field. He later served with Dun & Bradstreet Plan Services, ultimately attaining the position of regional vice president, where he was responsible for group and individual health products for the western United States.In 1990, Goldstein joined the Word & Brown General Agency as vice president of general agency operations and earned the coveted NAHU Golden Eagle for Management award. In 1996 he was named senior vice president of Word & Brown's newly launched CaliforniaChoice Exchange and subsequently appointed CEO in 2011.Goldstein can be reached at CHOICE Administrators Exchange Solutions, 721 South Parker, Suite 200, Orange, CA 92868. Email: