Independent Agents and Health Care Reform
The media frenzy that surrounded the U.S. Supreme Court’s monumental decision on the constitutionality of parts of the Patient Protection and Affordable Care Act (PPACA) has simmered down. But for insurance agents, the topic still looms large. The law – which most people know colloquially as “health care reform” or even “Obamacare” – will have a lasting impact on health care in America, particularly on health insurance.
The court’s ruling upheld the individual mandate – or the requirement that all Americans have health insurance – which was the lynchpin in determining whether the health care law would stand, be dramatically altered or even scrapped altogether.
Like most pieces of legislation, the Affordable Care Act is complex, and no quick glance at the thousands of pages it contains will give you an idea of how it will change the world of health insurance. Agents face many tough questions and new realities. So, what do you need to know and what can you do? Here are a few starting points:
- Variances from state to state. While the PPACA is a federal law, much of how it affects insurance agents will vary from state to state. It remains to be seen whether and what kind of commissions will be allowed on state health care exchanges, which are essentially marketplaces that allow uninsured people and some groups to shop for health insurance on their own. For insurance agents, the concern is that allowing consumers to shop on their own will be a dramatic drain on business. It’s likely that the end results could vary widely. After all, comparing Montana to Massachussetts or Vermont to Kentucky is like comparing apples to oranges – the differences are too great to generalize. Pay close attention to the developments in your state – some already have accepted grants to either establish an exchange or consider establishing an exchange. Alaska, Louisiana and Florida are the only states to have outright rejected federal grants for exchanges.
- Diversification is a good thing. The old adage about not putting all your eggs in one basket applies. To keep your business flourishing, it’s important to diversify the products you sell – now is a good time to explore selling other kinds of insurance. If you already do sell multiple types of insurance, it might be best to invest more in developing those lines of business. The next few years will bring a lot of changes to the ways in which you can benefit from selling health insurance, so it’s important to get to work now on creating new avenues for income. Getting started in a new direction might seem like a big hurdle, but it can pay off over the long term, particularly if you see a downswing in health care insurance-related revenues.
- Make the extra effort to reinforce customer loyalty. One characteristic of the coming exchanges is that they will be Web-based and automated – functioning a little like an airfare search site. For a lot of customers, that will be a recipe for frustration and confusion – and it might already be a source of anxiety. Making the effort to help guide your clients through the coming changes in health insurance will establish you as an adviser in their minds. The health care reform changes will be a testing ground for just how much customer service can help you retain business, so it makes sense to invest in those relationships now. You could even get started by calling customers and offering to discuss how health care reform will affect them. Plenty of people are confused by the law, and if you provide pro-active guidance now, clients will see you as a knowledgeable resource in the future.
Above all, it’s important to be aware and informed about how your business will be affected as more parts of the law are rolled out. After all, an adaptable agent is a successful agent.