Solutions to Uncertainty STATE OF THE MARKETPLACE: The Future of Individual Private Healthcare Exchanges is Now

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1 Solutions to Uncertainty STATE OF THE MARKETPLACE: The Future of Individual Private Healthcare Exchanges is Now

2 STATE OF THE MARKETPLACE: The Future of Individual Private Healthcare Exchanges is Now Recent developments in the individual health insurance marketplace are raising big questions about what s next for carriers, commissions, and where Private Healthcare Exchanges fit into today s sales environment. Commissions: On the Chopping Block? The fact of the matter is that in trying to create long-term sustainable pricing in the health care market, many insurers are reducing or even eliminating broker commissions for business sold outside of the annual Open Enrollment period. Carriers allege that plans sold within Special Enrollment Period (SEPs) windows for reasons such as a job loss or a move, have been abused and that customers have been using such periods as excuses to sign up when they are sick or planning to use medical services. Downgrading broker compensation structures is not a new response from insurance carriers. Along with making adjustments to plan designs, it s been a natural market correction measure that carriers have used to mitigate their losses. Historically, once they re able to stand on more solid ground based on their emerging claims experience, we ve seen them modify their positions. During the current correction period, agents and brokers are once again reflecting on their own viability in the individual health market. Is staying the course and continuing to offer health coverage to their clients and maintaining a Private Healthcare Exchange Platform worth their efforts? HERE S OUR STANCE: We believe the sales approach required to serve clients today and in the future is best carried out with a full-range of product and carrier solutions that go beyond just medical options offered during annual Open Enrollment periods. Helping consumers navigate the post-aca marketplace is a 365-day a year proposition. That s why we believe the consultative, yet tech-infused, sales approach offered by a Private Exchange platform is more vital and relevant than ever. 2

3 Embracing A New Strategy for Individual Healthcare Insurance Sales Success As an easy-to-use e-tail platform allowing people to browse, compare, and purchase among a wide variety of healthcare insurance products, a Private Exhange is a solution empowering advisors, as well as associations and affiliation groups, to flourish in the post-aca healthcare environment. Private Exchange owners can succeed by relying on a platform that simplifies the sales and enrollment process. After all, a custom-branded private exchange should facilitate: Access to affordable healthcare coverage. Americans need health insurance and despite opposing political views on the subject, healthcare reform was put into place to make health insurance more accessible. Private Exchanges are a perfect solution during Open Enrollment when volume of activity is at its height. During these Open Enrollment months, Private Exchange owners can grab market share and build their book of business in an efficient and economical way. As important, it positions Private Exchange owners to suggest additional lines of coverage to their customers. The more lines of coverage a customer buys, the more loyal and persistent they become! These additional sales, though, aren t just made during Open Enrollment months. Cross-selling gap coverage or dental coverage may occur months after the initial medical sale and is often driven by drip marketing campaigns from all the consumer data compiled through the platform. This timeframe after Open Enrollment, referred to as the Special Enrollment Period for medical coverage, should be viewed as the true selling season for ancillary products. Personalized, expert service. Beyond the technology, consumers should be able to turn a the Private Exchange support team for guidance and solutions when there s a need to drill down on their unique coverage scenarios. This keeps the Private Exchange owners out of the weeds, but makes growing and maintaining a Private Exchange owner s customer base a year round endeavor. That s why there may never be a better time to launch a Private Healthcare Exchange and commit to serving healthcare consumers with the resources and expertise they ve come to expect from their affiliation groups and advisor communities. 3

4 Realizing the Lifetime Value of a Customer By offering the perfect blend of healthcare insurance shopping resources, a Private Exchange is a perennial revenue source: a multi-product, multi-carrier platform that drives business 12-months-a-year. The ACA s Open Enrollment season, while driving most of the major medical sales activity, lays the groundwork for future, ongoing sales. When a customer enrolls in a major medical plan, the Private Exchange gathers every piece of information required for lead generation. There s a built-in opportunity for advisors to review their major medical coverage and provide advice on the customer s entire healthcare insurance needs. They can match their clients with the right plans and fortify their protection with meaningful supplemental products that boost business value, such as: Metal gap programs that help make major med more affordable for those with high-deductible health plans Dental and vision plans that are always popular sellers in the individual market Cancer, critical illness, and ancillary life products that round-out consumers portfolios In essence, by selling health insurance during Open Enrollment, a Private Exchange owner is generating leads for other high-revenue products expanding their revenue base beyond what they even envisioned. Uncovering New Opportunities and Product Lines In addition to the supplemental products, short-term medical sales during Special Enrollment Periods are on the rise and continue to pay full commissions. A short-term product offering may be an ideal solution for consumers who missed the ACA s annual Open Enrollment deadline and don t qualify for a Special Enrollment. And, thanks to healthcare reform, these plans have evolved. They re no longer built around filling just a short coverage gap. Instead, they look and feel more like permanent plans. Knowing many consumers may need a plan to carry them from one Open Enrollment period to the next, some insurers have lengthened the terms of a short-term policy to fill this entire gap, and some temporary plans are even offering coverage on a guaranteeissue basis. Likewise, product opportunities don t have to end when a consumer hits the age of 65. Private Exchanges serve as a Medicare shop-and-compare tool as well. People age in to Medicare every day of the year and compensation for these over-65 products continues to be robust. 4

5 More Changes Ahead It s our convicion that carriers will continue to understand the value that agents and brokers bring to the individual medical marketplace and that the reduction of compensation is simply a short-term market correction. We contend that insurance advisors will become even more valuable as we move ahead through more changes, and will continue to be a constant in consumers lives. Change is part of the growth process, and we re in the midst of the growing pains. We appreciate that for insurers and advisors alike, maintaining profitability is critical to success. That s why a Private Healthcare Exchange whether it s used by a broker, association, or affinity group is a solution that might come to define the future of the individual health marketplace. Solutions to Uncertainty To get your own MyConsumerLink Private Exchange from HealthPlan Services: solutions@healthplan.com or call: (877) About HealthPlan Services HealthPlan Services (HPS) is the largest independent provider of sales, service, retention and exchange technology solutions to the insurance and managed care industry. Since 1970, HPS has offered customized administration and distribution services to insurers of individual, small group, voluntary and association plans, as well as valuable solutions to thousands of brokers and agents. HPS proprietary, scalable technology provides innovative consumer-facing solutions that are turnkey self-service tools for insurance carriers and distribution partners. HPS offers an ever-expanding array of services to a diverse and growing client base, and administers products that include group and individual on and off exchange medical (PPO, HMO, indemnity, consumerdriven), dental, vision, life, disability, cancer, critical illness, accident, long-term care, limited medical, as well as various other ancillary insurance. HPS is committed to providing extraordinary service to its customers. HPS is a Wipro company. For more information about HPS, visit www. healthplan.com. 5