Obamacare is starving agents out of the marketplace but helping your clients manage soaring out-of-pocket costs can be a game changer.
Janesville, WI (January 2014)
We’ve seen plenty of news stories about the winners and losers of Obamacare. Yet while the media has focused on sticker-shocked consumers, it has virtually ignored another losing group: insurance agents. Once they were trusted advisors who were decently paid for helping consumers find the perfect healthcare plan. Then the ACA happened.
“Agents are losing their identities under Obamacare,” says Greg Hellmich, vice president of agent distribution at Smart and Simple insurance development (SASid). As the government has taken more and more steps to basically commoditize healthcare, compensation has been cut to the point that many agents are leaving the industry.
He says his company’s solution is a win-win for both parties: Simply offer consumers a high-deductible ACA-compliant plan paired with a supplemental plan that helps consumers manage their increased out-of-pocket exposure.
SASid is preparing to unveil its deductible supplement plans, which pay fixed indemnity benefits toward sickness and accidents. Hellmich says there are four reasons agents should offer these plans to their customers:
REASON 1: For many policyholders, having two plans is less expensive than having one. Starting in 2014, Americans will be required to have a qualified health plan or pay a penalty. QHPs can have large deductibles, co-pays, and out-of-pocket expenses up to $6,350 per person or $12,700 per family. Hellmich says “SASid’s supplement plans can provide significant relief from these costs. Very few customers feel comfortable with such high deductibles.”
Let’s say a client purchases a QHP $6,000 silver PPO plan for $209.45 a month and pairs it with a QHP supplement 5000 plan for $138.04 a month. Her total is $347.49 a month for both plans. Had she purchased a platinum QHP plan instead, her premiums would have been $98.04 more per month or $1,176.48 more a year.
“Purchasing these two plans together saves your client almost $100 a month and provides first-dollar benefits for hospital/ICU stays, ER visits, office visits, and so forth,” says Hellmich. Since few people are accustomed to or comfortable with such high out-of-pocket costs, you’re also providing psychological relief, which is just as valuable a service as the financial savings.
REASON 2: It makes selling Obamacare plans profitable for the agent. For most insurance agents, compensation has fallen rapidly over the past few years. Now that Obamacare has officially rolled out, the situation is even worse, the commissions on ACA-compliant plans are extremely low. By pairing supplements with high-deductible plans, agents can make considerably more money.
“Our supplements pay two to three times the commission of ACA-compliant plans,” notes Hellmich. In fact, the supplement strategy can make the profession seem attractive again to those who felt they had no choice but to leave it.
REASON 3: It increases customer loyalty. Deductible supplement plans are not available on public exchanges. This fact is good news for agents as it gives consumers a reason to choose them and stick with them rather than going the website route.
“When you sell insurance in a bundle this way, you tend to shore up your client relationships,” says Hellmich. Clients are less likely to leave you because it would be difficult for another agent to replicate the combination.
“Plus, customers are generally grateful to any agent who can help them navigate the complexities of Obamacare,” he adds.
REASON 4: It increases agent satisfaction. Being able to sell ACA-compliant plan/supplement combos makes agents trusted advisors again, notes Hellmich. It allows them to feel they are doing meaningful work at a fair price.
“Insurance is both a science and an art and should never have been commoditized,” he says. People’s lives are not one-size-fits-all, and insurance shouldn’t be either. These supplements allow agents to say, “Okay, let’s talk about your specific needs and find a solution tailored to you.” This helps agents bring back some of the art aspects of selling insurance.
About Greg Hellmich:
Greg Hellmich, vice president of agent distribution at SASid, is a 25-year seasoned veteran in the life, health, and ancillary insurance industry. Contact him directly at 608-314-2116 or firstname.lastname@example.org.
Smart and Simple insurance development (SASid) has built, administered, and marketed insurance products and web applications for the insurance agent since 1999. For more information regarding the deductible supplement plans, check out www.sasid.com/deductible-supplement-insurance.