Changes To Health Insurance This Year

There are a variety of changes to health insurance plans that have taken effect in 2020. Changes include everything from new states creating individual mandates to carriers offering new plans in new places. In order to provide customers with accurate information, you need to stay up-to-date on all of these changes. Here’s a look at what’s new for 2020. 

Premium Prices 

Health insurance premiums changed this year, as they do every year. Surprisingly, premiums increased only slightly in most states. In some states, such as Maryland and Wisconsin, premium prices have actually decreased.

Health Insurance Mandates 

chartoon of a man with a speaker stangin on top of gold coin piled up.
Some states still have their own individual mandate that people must have insurance or face a penalty.

Prior to 2019, the individual mandate meant that people had to have health insurance or face a financial penalty. An exemption was needed to avoid this penalty. When the mandate was repealed in 2019, many thought that fewer people would purchase health insurance. The opposite has actually been true: more people have been signing up for plans since the repeal in 2019. 

Some states still have their own individual mandates. People in these states who fail to sign up for insurance will need to qualify for an exemption if they want to avoid a penalty. States who currently have an individual mandate are:

  • California
  • District of Columbia
  • Massachusetts
  • New Jersey
  • Rhode Island
  • Vermont

Changes In Cost-Sharing

According to the CMS, cost-sharing amounts have changed for 2020. The changes are as follows,

  • Self-only affordability cut-off for employer plan coverage: Officials proposed increasing this limit from 8.3% to 8.39% of projected household income. In the final parameters document, the self-only affordability cut-off for employer plan coverage was set at 8.24%.
  • Maximum annual cost-sharing amount: Officials had proposed increasing this amount from $7,900 last year to $8,200 for self-only coverage, and from $15,800 to $16,400 for family coverage. In the end, CMS decided to set the maximum annual cost-sharing amount at $8,150 for self-only coverage, and at $16,300 for family coverage.

New Insurers In Town

green sign that says possibilities with many arrows leading to the word possibility.
New insurers are expanding into more counties, offering people more options and possibilities.

The ACA has more marketplace options in more areas this year. Centene and Oscar 

Health have expanded into counties where they hadn’t previously offered plans. Blue plans, Cigna, and Anthem have also chosen to expand into new areas. 

Oscar will now cover individuals and families in 6 new states, and a total of 12 new markets. For its new individual markets, Oscar has expanded in Florida, offering plans in Miami, Tampa, Ocala and Daytona. Oscar is also offering plans for the first time in Philadelphia, Denver, Richmond, Atlanta, and the Kansas City metropolitan area across Missouri and Kansas. In Texas, Oscar will begin offering plans in Houston and expand its current options in Dallas-Fort Worth. Oscar is also expanding to serve many counties in Western Michigan.

Centene plans on expanding into 10 markets, including Arizona, Florida, Georgia, Kansas, North Carolina, Ohio, South Carolina, Tennessee, Texas, and Washington.

Cigna announced they will be expanding in the federal health insurance marketplace, specifically 19 new markets (counties) in 10 states: Arizona, Colorado, Florida, Illinois, Kansas, Missouri, North Carolina, Tennessee, Utah and Virginia. They are offering $0 preventive care, free telehealth services, and low-cost options for chronic disease management. This is a big deal for people that did not previously have this kind of coverage available to them.

What insurance agents need to know during the COVID-19 pandemic

It’s going to be the buzz word of the century.  COVID-19, The Coronavirus, The pandemic.  Right now, it has the world’s economy in shambles and people are fearing for loved ones’ well-being.  It will go down as the great interruption of the 21st century.

With schools shut down and businesses operating remotely, any sense of normalcy is all but forgotten.  Along with personal lives, this same impact is being felt in industries across the country.  The insurance industry is no exception to this, and what insurance agents need to know during the COVID-19 pandemic needs to be laid out.

As a lead company that runs marketing campaigns nationwide, we have experienced the digital impact of this virus first hand.  We have generated leads digitally for over 10 years in numerous verticals including Medicare supplement, individual health, commercial, and group health.  We are seeing wild disruptions in how consumers typically interact with insurance agents in every one of these verticals.

However, we are discovering trends that could help agents maximize sales during this turbulent time. Your adaptation to these discoveries and use of available tools will make the difference.

The impact in numbers

The signs are all around us.  At the time of writing this, there has been a 36% drop in the US stock market in a span of 5 weeks.  Video streaming rates are so high that some companies are decreasing quality by 25% to save bandwidth.  And in some cities, maximum capacity of patients and exhausted resources have become a reality for healthcare workers.

Insurance agent adapting working from home

These extreme statistics are a reality for the entire country.  Granted, most are not as severe as those surrounding the medical industry.  However, the impact is still considerable.

In the insurance industry, we know that variability in traffic is inevitable.  Even when there isn’t a pandemic, our average variability is 3% from day-to-day.  Since the COVID-19 pandemic has settled in the United States, we at Benepath have seen as much as a 33% variability in impressions and traffic.  An 11x difference.  Through discussions with the competitors in the insurance space whom we have a relationship with, we discovered this variability has been universal.

What’s startling is we do this professionally, we specialize in it, can you imagine what the impact is for agents who try to do this on their own?

What does this mean for agents?

Here are the top 3 topics of conversations our sales team and customer service staff is having with clients:

  • Closed offices
  • Need for supplemental traffic
  • Market uncertainty

We’ve seen call centers close their doors temporarily and large agencies having to adapt their standard procedures.  While a frightening reality for some workers, this is an opportunity for agents around the nation capable of working from home.

With call centers closed and large agencies’ productivity slowing, fulfillment opportunities now move in the direction of independent agents and smaller agencies to field the demand for insurance.  In short; while your personal life may be experiencing disruptions, your sales trajectory doesn’t have to.

However, for agents who typically operate out of an office serving clients face-to-face or visiting their clients’ homes, adjustments have to be made.  The question is how do you get “in front” of these potential clients.  Social media and advertising are great ways to do this normally, but like previously stated, nontraditional consumer behavior creates a unique set of challenges in the current sales environment.

Board that read "Things To Do: 1) Own Today 2) *left empty* 3) *left empty*

 

So what can you do?

It’s time to think from a perspective of how your clients are spending their time.  Because consumers are forced to minimize typical life distractions, consumerism is in a cycle unique cycle compared to standard trends.

To start, adopt new technologies.  With the common availability of video chat systems like Zoom, BlueJeans, Skype, FaceTime and so many more, the option of getting “in front” of your client doesn’t have to stop because you can’t be there in person.  You can even utilize social media messengers, texting, and personalized video presentations to get your message in your customers hands.

Now may also be the time to work with a digitally focused lead company like ourselves.  Companies who have been adapting to this unique set of challenges from the beginning have a leg up compared to most smaller marketing teams or general marketing agencies.  At Benepath, we understand where insurance consumers are going to get their insurance coverage needs fulfilled.  Because of this, we have started to field a surge in consumers turning to online means to do so.

Another option is to express your availability to your network Insurance agent video chatting with client on computerof clients and offer incentives for referrals.  Your clients are on the phone and engaging through social media with their family, friends, and business acquaintances more often during this period.  If you can secure head space in those clients, the likelihood of a referral if the topic of insurance comes up increases.

Lastly, make yourself available.  Consumers will have new questions, new concerns, and uncertainties about their coverage.  The more effectively you defuse their anxieties, the more likely you are to develop a relationship with them that will outlast this pandemic.  That directly lends itself to sales down the road.

Resources to help you

We pride ourselves in our motto; Together we succeed.  We stand behind this now more than ever.  As a community, an industry, country, and part of our interdependent world, we need to support one another.  To play our part, we compiled these tools and articles to assist you in these trying times.

  • Benepath agent guide download sample imageAgent Lead Calculator – This tool allows an agent to quickly calculate how many new clients they need in order to achieve their goals (or needs in these circumstances).
  • Agent Guide – This guide lays out disposition data that agents we partner with have reported back to us.  Based on best practices and compiled data, we present our findings to help you succeed with your insurance leads.
  • Best Places to Find Online Classes – We compiled a non-bias list of online sources to find classes in skills you want to learn or improve.  This may be the perfect tool to help you adapt to the current conditions.
  • Harnessing the Power of Referrals – As discussed above, we believe that the power of referrals could benefit you greatly during this time.  In this blog post, we discuss best practices for gaining referrals through your network.
  • Maximize Productivity – Have you heard of Covey’s 4 Quadrant Theory? It’s a simple process to maximize the productivity of your time.  Successful professionals across all industries use it to organize their personal and professional lives.  It’s time to apply it to yours.
  • Outbound Sales Cadence Insights – Every agent has developed cadences that work for them, but could they work better is the question you should be asking.  We recently developed this guide to help audit your sales cadence and provide you with tips to implement better ones.

We are here to help

This compilation is just a sample of the beneficial tools and documents we create for insurance agents.

We are confident that you can make it through this.  If you are in need of a partner to help drive profitability or just want to talk about the benefits we can provide to your business, contact us at the number above or fill out the form on the side bar.  Together we can help you achieve your goals.

Together we succeed.

PSA:  Listen to the CDC and WHO, and for the safety of the nurses, doctors, elderly, and immunocompromised.  Lets work together on eradicating this disease.

 

Get Ready For The 2020 Health Insurance Tax

Insurers were given a pass in 2019 by Congress regarding their annual health insurance tax. The reason was that the government was concerned about consumers’ out-of-pocket costs. However, if the ACA’s health insurance tax resumes as planned, this ‘free pass’ might be over and insurers will face a $15.5 billion tax bill in 2020. The health insurance tax was created to fund the implementation of the ACA’s marketplace exchanges. For consumers, this means that insurers will raise premiums by more than 2% if the tax is implemented by the IRS.

Health Insurance Tax Over The Years

Oliver Wyman Actuarial Consulting recently analyzed the projected impact of the health insurance tax on health insurer premiums over the next 10 years. They found that premiums are likely to increase by 2.2% in 2020. 

The tax started at $8 billion in 2014, increased to $11.3 billion for 2015-2016, and had a suspension in 2017. The tax was then reinstated at $14.3 billion in 2018, and then given another suspension for the year of 2019.

Who It Applies To

A fully-insured health plan is the more traditional way to structure an employer-sponsored health plan. With a fully-insured health plan: The company pays a premium to the insurance carrier. The health insurance tax applies to all insurers offering fully-insured coverage. This goes for :

  • on-exchange and off-exchange individual markets
  • large and small group markets
  • insured public programs such as Medicare and Medicaid

The Rise In Premiums

Premium increases will vary by state. However, premiums are expected to increase annually anywhere from $154 to $479. A person in the individual market can face a $196 increase. A person in the small group market can expect a $154 increase, while a family of 4 faces a $479 increase. As for families in the large group market, the increase for an individual will be about $158, while a family faces a $458 increase. 

The Outcome Following The Tax

If the tax is implemented and is as high as almost $16 billion, then increased tax burdens on small employers will follow. Fully-insured small employers will face the repercussions, while private and self-insured public employers will not. Employers are not the only ones who will have to pay for the tax increase. State taxes will go up for everyone in order to cover the increased tax on Medicaid. 

More importantly, many people might opt out of insurance due to the increase in premium costs. Healthier individuals opting-out will cause an imbalance in the risk pool, meaning higher premiums for the (less healthy) people who are insured. 

As of now, there is no definitive answer if the tax will be implemented in 2020. Congress is considering bipartisan legislation that would suspend the tax through 2021, but it is not a guarantee. If the health insurance tax is implemented, insurance rates and premiums will be more expensive than it already is. 

Medicare’s “3-Day Rule” Lawsuit Goes To Trial

There was confusion and misinformation regarding the 3-day rule for skilled nursing facility coverage. In order to get the 100 days of skilled nursing coverage from Medicare, the mandate states a beneficiary must spend at least 3 days in the hospital as an inpatient. However, doctors and hospitals can admit elderly patients on an “observation stay,” which does not count as an “inpatient.” A class-action lawsuit, filed back in 2011, challenged Medicare’s eligibility rules for skilled nursing coverage. Trial over the lawsuit is finally being heard in a federal courtroom.

After an “observation stay,” senior patients are then discharged to a skilled nursing facility, complete with a bill. Because a substantial number of hospitals follow these routines, seniors are often forced to pay these bills out of pocket. Medicare will not cover the costs since it does not qualify as full admission.

In recent years, Medicare imposed strict limitations on hospital admittance. This explains why patients who are admitted are put under “observation.” Medicare pays one-third less for an observation patient than one who is in full admission. While Medicare benefits from these cost-saving tricks, it’s the patients that suffer.

Another way Medicare saves itself money is by shifting the cost of hip and/or knee replacements onto the beneficiaries. Medicare encourages doctors to perform these replacements as outpatient surgeries so that discharges happen within a few days.

This has caused an uproar with patients because many of them simply cannot afford sky-high medical costs. So in turn, about 14 patients filed a class-action lawsuit. If they win, Medicare might have to reimburse almost 1.3 million beneficiaries.

President Trump’s Medicare chief, Seema Verma, listened to the complaints and voiced that something does have to change in order to help the beneficiaries. She stated, “We’ve talked a lot about the operational changes that we’re making, the policy changes that we’re making, but at the end of the day, this is about putting patients first.” If the 3-day rule does in fact change, the costly bill following a hospital visit will be alleviated, and many beneficiaries will be happy.

Health Insurance Is A Good Companion For Final Expense Insurance

Back to the burial insurance, or final expense insurance. If you sell this type of a policy alongside health insurance policies, it is a natural segue to also talk about burial needs and how an unexpected death could impact a person’s family financially. While there is no need for a hard sell, discussing health insurance is a natural way to open the door to considering what may be needed in the event of a life-threatening health scare.

But, it is also not something to bring up while discussing various health insurance policies. You have a strategy to follow while selling health insurance. Use the same type of strategy you use to sell health insurance to close other possible deals on different types of insurance. For instance, health insurance, particularly for those 65 and over, is something that is very important and part and parcel of Medicaid and being covered for health issues, is the possibility of being hospitalized, sent for surgery and need recovery time in a care home, or need at-home care to recover.

Part of the consideration of health care coverage is what is needed in the event of a fatal illness or sudden, unexpected death. Discussing Medicare and final expense insurance, while perhaps awkward, is a stroke of brilliance. Humans do have a way of avoiding such discussions, but they definitely are necessary. If you can bridge the difficult gap between good health care coverage and making sure all possible related expenses can be covered, your conversion rate jumps.

Selling Insurance? Know Your Product

Often insurance agencies sell more than one health insurance policy. Agents need to be able to sell different types of polices. Selling insurance, no matter what type of insurance, means agents need to know their product inside and out.

To successfully sell insurance, agents need to know their products inside and out. You need to intimately know that conditions and terms of all the policies. It is critical to be able to explain the pros and cons to clients wanting information on health insurance. It is all about educating the potential buyer to sell them what they want and need.

When dealing with multiple insurance policies, not only is it important to know each policy, it is also critical to know how to answer tough questions. Clients will often have questions and concerns.

What about counter-arguments? Yes, most definitely you need to have those lined up as well, particularly to the most common objections that you usually hear when discussing insurance. Only by understanding the policies in great depth are you able to close sales and grow your agency through conversions.

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