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Health Advisors Not Feeling Like the Sky Is Falling

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Are health insurance advisors thinking about exiting the business? Or is their business improving? It depends on whom you ask.

About one-third of independent health insurance advisors said they are thinking about leaving the health insurance business completely. Meanwhile, 29 percent of health advisors said their business is worse off since the Affordable Care Act (ACA) took effect.

But at the same time, 71 percent of health advisors told a survey that their business was either doing the same or better at the end of the last ACA open enrollment period than it did during the same time frame in 2013.

Those were among the findings in the Broker Barometer Survey commissioned by the National Association of Health Underwriters (NAHU). McKinsey & Co. surveyed 1,000 NAHU members before the initial ACA open enrollment season in October 2013 and continuing through the end of the enrollment season in April 2014. The NAHU members also were interviewed during the months of July and August 2014.

In the initial survey, which took place before the first open enrollment season began, NAHU members reported their concerns about the ACA. The top misgivings surrounding ACA included the law’s potential impact on employer-sponsored health insurance, the complexity of the law and the amount of consumer education required because of it, and the time demands placed on advisors.

But with the next open enrollment season almost here, a NAHU spokeswoman said she is getting more positive vibes from the membership.

“Our members are feeling much better going into this open enrollment season,” said Kelly Loussedes, NAHU senior vice president of public relations. “They have armed themselves with resources and they know what to expect this time around. They’re not feeling like the sky is falling.”

As for the one-third of health advisors who are thinking about bailing, Loussedes said that NAHU’s membership numbers do not reflect an exodus from the business. “Our membership has remained level,” she said. “What we are seeing, though, is that many of our members are diversifying into areas such as property/casualty and life insurance.”

One factor that may be leading to many health advisors leaving the business is demographics. Many who are nearing retirement age are deciding that it’s the right time to exit the business. In addition, few people are entering the business.

NAHU is addressing this issue by forming a committee called the Vanguard Council, Loussedes said. “The majority of our members are in their late 40s, early 50s,” she said. “The Vanguard Council is made up of not just younger agents but also those who are creative innovators in the industry, regardless of age. Their mission is to get the younger demographic to want to become an agent.”

The Vanguard Council is putting together a social media strategy as part of its effort to make sure the health advisor is not a dying breed.

As the survey continued through open enrollment season, the answers given by the NAHU members showed that many of their fears about the ACA had come true. Among the themes emerging in the enrollment period survey findings:

- Advisors are required to do more work, but they have less time in which to do it.

- Some advisors are seeing a switch in their practice from serving the small group market to the individual market.

- Commissions continue their downward track, with many respondents predicting that per capita compensation will become the norm.

- Advisors are evaluating the profitability of the individual market.

As the next ACA sign-up gets closer, advisors are expressing three major concerns. They are: rate increases, advisor workload during open enrollment season and the number of clients who will switch plans versus the number who will automatically renew their current plan.

Of those advisors who said ACA is hurting their practice, more than half said they plan to make changes to their business in response. Those who plan to make changes said that focusing their practice on other market segments or offerings and investing in marketing were the top things they plan to do.

 

 

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Susan Rupe is assistant editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Connect with Susan →

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