Last month, CAHU held its annual Health Care Summit in Los Angeles. Peter Lee, executive director of Covered California explained how the state exchange is doing more to cater to brokers. He stressed that brokers have proven to be very valuable partners.
The conference was very well attended by brokers. On one hand, carrier executives said that commission levels are holding steady at 6% to 6.5% for 2015, and several are now offering attractive bonuses. But, on the other hand, more than one said that commissions will probably drop further after 2015. One executive even said that commissions may be eliminated altogether at some point, and it will be up to brokers to bill their clients for services.
Peter Lee, executive director of Covered California, said that agents have been key to the initial success of the state exchange – selling 40% of all Covered California plans. Lee acknowledged that the consumers’ experience has been rocky with long wait times to sign up. When it comes to lessons learned, Covered California has found that consumers need many points of contact, such as going online and having in person consultations. Lee got cheers from the room when he said that Covered California is encouraging consumers to visit insurance agents. Covered California is also considering offering a directory of agents who are licensed to sell exchange plans. “They key is getting in person help. We learned that partnerships with agents will be critical,” he said. Covered California is offering the following agent-friendly features in 2015:
• Agents will have new e-learning tools.
• Agents who are certified don’t need to get recertified.
• There will be dedicated phone lines for agents as well as additional staff to answer calls.
• Agents will be invited to enrollment events.
For 2015, premiums in the exchange will go up 4%. The next open enrollment, which starts November, 15, runs three months compared to last year’s six-month period. That’s a short time frame to enroll an expected 700,000 new members. Lee says that enrollment will get harder as the long-term uninsured make up a bigger share of the remaining pool of Covered California prospects. There will be more middle class consumers who get a smaller subsidy than do lower income consumers. “You need to help them understand value of insurance. We will have to reach in higher trees for new enrollment,” he told brokers. Lee said that the key to enrollment is offering in-person help. However, success will not just be about enrolling people, but also about getting renewals. To make that go smoother, consumers who want to keep their plan will be re-enrolled without having to do anything. Exceptions to that rule affect a relatively small number of people. For example, Health Net changed from a PPO to an EPO.
There have been hiccups with people not getting all the providers they wanted. But two Blue plans have added doctors and medical groups to their networks. There has been a problem with in-network doctor offices telling patients that they don’t take Covered California plans. Covered California is working to educate doctors’ offices on the plans, he said.
Covered California is also doing the following for 2015:
• In 2015, Covered California will begin offering health insurance plans to employers with 100 or fewer eligible employees for coverage effective January 1, 2016. Employers can enroll in Covered California’s SHOP throughout the year. Starting in 2014, the maximum tax credit increases to 50% (35% for nonprofits) and is available for a total of two consecutive years. Generally, businesses with 10 or fewer full-time-equivalent employees and yearly wages averaging less than $25,000 will qualify for the highest credits.
• California is considering adding new dental benefits to the SHOP.
• Covered California is making its website more consumer-friendly.
• Consumers will be able to pay for their first month’s coverage upon enrollment.
• There will be seamless notifications for families with a parent on a private plan and kids on Medi-Cal.
• Response times will be faster for verification of citizenship and lawful residency.
• Covered California will be sending consumers a 1095 in January so they can attach it to their tax forms. Many consumers are not aware that they are getting a subsidy or that they would be paying a tax penalty without getting coverage. Lee said that these notices will drive home the value of the coverage.
Carrier executives gave their take on the market and described plan changes. When it comes to small group sales, most employee groups are sticking to grandma plans. (Note: “Grandmothering” is the term the federal government now uses to extend non-Affordable Care Act policies until 2016. It applies to individuals and companies with fewer than 50 employees.) Joe Greenberg vice president and general manager, Small Group of Anthem said, “Less than 5% of small groups are opting into ACA plans.” Dan Tyler, regional vice president of Health Net said, “Most groups are taking grandma plans. We offer grandpa plans, grandma plans, and competitive ACA plans.” Barry Carvalho vice president, Sales and Account Management of Cigna, said, “Forty percent of what we sell are ASO products. We ask brokers to consider this option.”
When it comes to retaining groups, the carriers have done pretty well overall. Greenberg said that Anthem has lost some micro groups. But some of its small groups have grown into large groups. Also, Anthem is recapturing business in the individual market. Dan Tyler, regional vice president at Health Net said, “The great majority are renewing with us. We were concerned about losing micro groups, but we only lost a little.” Kathy Dibble, vice president at Aetna Health Plans said, “The small group market is growing. We are not seeing small groups going to the individual market. Brent Hitchings, vice president and general manager of Small Group Business for Blue Shield of California said, “There is some shrinkage in the over 50 and the low end.”
Some carriers are making it easy to re-enroll. Brent Hitchings of Blue Shield and Marshal Myers, director of Sales and Account Management for Kaiser Permanente said that, if groups make no changes, they don’t have to do anything to re-enroll in plans.
Carriers have been tweaking their networks. Kathy Dibble of Aetna said, “We have not changed our existing networks. But we added more narrow networks. We have also added Savings Plus.” Joe Greenberg of Anthem said, “We provide rich networks and narrow networks. We are also offering virtual medicine and a new large group option with a narrow network in Southern California. We now have an ACO model with PPOs and self-funded plans.” Brent Hitchings of Blue Shield said, “Our individual network grew 50%. Dan Tyler of Health Net said, “Provider offices are confused by networks. We have avoided the drama by having one network for all PPOs. On the individual side, our network started out as narrow, but we expanded as providers asked us to join.” Tim Rhatigan, senior vice president, Small Business for Unitedhealthcare said, “Expect to see a new narrow PPO network and a new narrower HMO network. We are building on our PPO ACO strategy.”
Wellness is another important trend among carriers. Barry Carvalho of Cigna said, “Cigna wants to be known as a health improvement company. We give underwriting leniency to groups engaged in wellness.” Tim Rhatigan of Unitedhealthcare said that his company is also ramping up wellness benefits.
After listening to the broker panel, one audience member joked, “So what’s the good news?” Dan Tyler of Health Net said, “I hope you don’t leave this meeting feeling depressed. There are so many changes; that means opportunities to walk clients through choices and grab business – more so than any time we have ever seen.” Kathy Dibble of Aetna said that there have been a lot of mergers in the broker community with some leaving the market, which means opportunities for remaining brokers. “We can’t get members without brokers,” she added.
Ron Goldstein, CLU, president and CEO, CHOICE Administrators, stressed that new technology helps brokers succeed in today’s environment. He gave some stunning examples of how technology has changed our daily lives. For example, nearly 90% of purchasing decisions start with an online search, and there are more people around the world with mobile access than with safe drinking water and electricity.
Technology and the availability of data will continue to change the consumer purchasing experience. More and more consumers will look to online and mobile support during the purchasing process. The future of technology is leading toward consumer experience and profiling. To stay relevant, brokers need to embrace the following:
• Online enrollment
• Quoting via mobile and tablets
• Choice profilers that help recommend benefit solutions for employees
• Real-time updates (add-terms, changes)
• Digital Marketing including social and search engine optimization.
Employers and employees are expecting the following:
• Shop and benefit comparisons
• Consumer decision support tools
• Subsidy calculators
• Provider directories
• Rx comparisons
• Account management
But, businesses will turn to the expertise of the broker to help enroll and manage employee benefits – that will not change.
Leila Morris is senior editor of California Broker Magazine.