Many agents call me asking where the opportunity is when 2014 rolls around and I understand their uncertainty as there are still a lot of questions to be answered.
Regardless, as every week passes we are getting more information from the government as well as the insurance carriers. Here is a summary of what we are hearing.
There Will Be a Healthy Off Exchange Health Insurance Market
Multiple carriers have informed large agencies we work with that they will be offering a suite of health insurance options off of the exchanges. Some of these plans will conform and qualify as health insurance and others will not.
The policies which are not going to conform will be anywhere from your traditional mini-med plan to plans that are based on schedules as well but will cover more of what a healthy family will need than what we are used to seeing in this market.
The interesting thing to note is that the penalties plus the insurance cost will be less for most people than buying a plan on the exchange.
| Income | Premium | Tax Credit | Cost | Penalty |
| $40,000 | $12,130 | $10,148 | $1,982 | $285 |
| $50,000 | $12,130 | $8,745 | $3,385 | $285 |
| $60,000 | $12,130 | $7,193 | $4,937 | $285 |
| $70,000 | $12,130 | $5,504 | $6,626 | $429 |
| $80,000 | $12,130 | $4,530 | $7,600 | $529 |
| $90,000 | $12,130 | $3,580 | $8,550 | $629 |
| $93,700+ | $12,130 | $0 | $12,130 | $666 |
- 2016 Penalty = $2,085
- Rates are estimates from http://healthreform.kff.org/subsidycalculator.aspx
- Rates are for the Silver Plan for a family of 4, with a medium regional cost factor at the age of 40
Exchanges May Be More Welcoming to Agents
The last thing the Obama administration wants is for their signature plan to fail in terms of enrollment and we have already seen that enrollment in the catastrophic plans has been far less than forecast.
I have heard from various sources that commissions coming from the exchanges will be the same as commissions paid off of the exchange in order to encourage agents to help make the program a success.
Agents Will Still Be Able to Sell Critical Illness and Accident Plans
Even if commissions are limited on the exchanges, the cost of these plans will be so high and the benefits so low that consumers will want to supplement their coverage and buy the cheapest plan.
Most agents we know are selling these plans either bundled with the carrier or bundling it themselves but selling separate policies. Either way, it gets your income back to where it was prior to the MLR changes if you are good at the cross selling. We know several agencies where the revenue is higher than before.
The outlook for health insurance is now appearing brighter than it has in the past and we look forward to any additional insight any of our readers may have.
