This blog post is based on an interview with Lynn Schreder, co-owner and president of KHI Solutions and has been posted with her approval and permission. KHI Solutions includes more than 400 agents serving individuals and families, medicare eligible individuals, and small business owners throughout Iowa and the Midwest.
Note: AB denotes AgencyBloc and LS denotes Lynn Schreder
AgencyBloc: What did health plans look like before the marketplace?
Lynn Schreder: Not everyone was accepted. It was all based on your health; your coverages, premium, and chance of approval was based solely on your health. If you had a pre-existing condition, you were likely to be denied.
There also wasn’t financial assistance. There were no levels to choose from, no “metallic plans”. There was more ambiguity in the plans; plans weren’t created equally and greatly differed on coverages. Unless you drilled down into the plan itself, you weren’t entirely sure where you were and weren’t covered. You got what you could afford and you made the best of it. There weren’t guaranteed coverages like preventative care, maternity, or mental health.
AB: What are some of the biggest impacts the marketplace has had on individual health insurance sales?
LS: First, it forces policies to cover more and be more transparent. By law, every policy must offer the minimum essential coverage (MEC) which includes coverage for maternity, preventative care, and mental health, and must be accompanied by a summary of benefits and coverage (SBC) that details the benefits provided to the policyholder. In addition, you can choose from the tiered metallic plans: platinum, gold, silver, and bronze based on what you need.
Second, it has created a “Marketplace” or “Exchange” in hopes of making policies more affordable for those who qualify. You can buy from a variety of insurance companies and can potentially receive subsidies to help you leverage the costs of your policy so that you can have a plan that provides the MEC which meets the requirements set out by the federal government.
AB: Does news of UnitedHealth and Humana pulling out make you nervous?
LS: We need more competition and it’s unfortunate when carriers leave our market. Wellmark (Blue Cross and Blue Shield carrier for Iowa and South Dakota) has been around for over 75 years and is now making its entrance into the Marketplace, Coventry (now Aetna) has been steady in the Marketplace since the beginning, and Medica will be coming into its second year in the Iowa and Nebraska Marketplace. The key is trying to drive down premium costs, and one way to do that is through increased competition.
AB: What can individual insurance agents do to minimize the impact of the these two giants pulling out?
LS: You have no control over the market, so learn what you can as fast as you can and do what you can to protect your clients. For example, in this case, familiarize yourself with all the carriers in your market and what will be offered and how their distribution works in your particular state(s). In addition, it’s a proactive mission. Prepare your clients and agents for the coming changes, teach them what to expect, and have a plan for what to do when the changes do come.
AB: How can an industry-specific CRM or agency management system (AMS) like AgencyBloc make this transition easier?
LS: It helps you improve your agent-client relationships. The reporting capabilities available in AgencyBloc allow you to be proactive and prepare your clients and agents for the changes.
You can organize your clients by carrier type to see which ones will be affected, then you can pull their information up right there and call them before anything even happens. That way you, your agents, and your clients are all prepared for the coming changes and you have a game plan for what you can do when it comes.
You can also organize by coverage type to ensure that your med supp clients have the best coverage with the most competitive price. AgencyBloc also shows you which agent is on which policies with those affected clients, and you can send those agents reminders to follow up with those that will be affected so that everyone is on the same page.
AB: What do you think is next for the marketplace?
LS: That’s really hard to say. 2017 and the elections will prove to be an interesting time. One thing we will see is that, with Wellmark, we’ll be seeing new ways to reimburse the providers and we’ll have a new set of plans to offer. I’m hopeful for the future. Coventry has been there since the beginning, and if Wellmark can figure out the “secret sauce” of how to survive in the marketplace then there is hope for the individual market’s survival. But it’s hard to say. The election, president as well as congress, will be a huge factor.
If you have additional questions about ACA or health insurance call Lynn Schreder at 515-576-1800.