September 26th, 2011 by nmorford@sbmedia.com
The number of Americans without health care coverage is rising. This isn’t surprising, given the seemingly endless rounds of layoffs: fewer employees means fewer people covered under employer-sponsored plans. The 2010 Census revealed that the number of U.S. residents covered by their employers fell 0.9 percent from 2009 to 2010, to approximately 169 million.
This number has been dropping steadily for some time now. In 1987, the first year The Census Bureau began recording health insurance enrollee numbers, 62.1 percent of the population was enrolled in a public employer-sponsored plan. In 2010, after that 0.9 percent decline, just 55.3 percent of the population was enrolled in a public plan through their jobs.
In response, the percentage of citizens with privately purchased health insurance (individual coverage, family coverage, or coverage bought through an association) is growing, though not enough to account for the employer-sponsored decline. In 2010, the number increased by about 3.6 percent, to 30 million enrollees. The number of members in military or civilian government plans increased 1.9 percent, to 95 million.
Additional bright spots in the Census findings included a lower number of uninsured young adults (among people aged 18–24, the number dropped from 29.3 percent to 27.2 percent) and uninsured residents with household incomes greater than $75,000 per year (declining from 8.3 percent to 8 percent).
How will these numbers continue to change as the impact of health care reform grows? Some feel that the greater regulation and rising cost of health care mean that people will be priced out of the private health insurance market. Certainly, more employers are raising premiums or turning to other cost-sharing methods that make it difficult for employees to participate at the same level they have in the past. Will the exchanges of 2014 make care more accessible? Will the individual mandate stay in place, and force a resolution of the issue? Let us know your thoughts at editor@sbmedia.com.
Tags: health care reform, Health Insurance, health insurance exchanges, uninsured
Posted in Health Insurance, Insurance Industry Issues | No Comments »
August 23rd, 2011 by astonehouse@sbmedia.com
As you examine your various tools and solutions for clients, could this be the time to finally consider the possibilities for long-term care insurance?
Yes, for a long time, the product known as “nursing home” insurance did not set the sales world on fire. It’s a complex product to deal with and a challenging proposition to make to clients who may not see the value or understand the bigger implications of LTCI in their own future care.
But as we discuss in our feature in ASJ’s September issue, “Funding Our Future,” LTCI sales have been on the rise for those who’ve become experts in the field — and the product offers a unique opportunity for those who’d like to expand into the field and offer LTCI as a supplement to their traditional insurance tools. Among those who do sell the product already, ASJ’s 2011 Long-Term Care Insurance Market Study revealed that three-quarters of agents anticipate selling more policies this year than last.
Most importantly, it’s a product that can be positioned with younger clients who can qualify for much lower rates while still in their 30s and 40s, affordably establishing a safety net for their future care. According to our results, LTCI sales are still primarily aimed at clients in their 50s and 60s, but the younger generation represents a golden opportunity to highlight a product with vast and tangible benefits.
Education is key, not only for yourself as an expert in the field, but also in providing clients with valuable advice as federal legislation (particularly the CLASS Act, which may or may not eventually provide nationalized LTCI coverage) continues to develop or be potentially impacted by the pre-election political climate.
Whatever the case, the raw truth that so many of us will need some form of long-term care, either as we naturally age or as the result of a disabling accident or illness, makes LTCI a strong tool to consider. For more resources, visit www.AALTCI.org, www.3in4needmore.com or www.longtermcare.gov.
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June 23rd, 2011 by nmorford@sbmedia.com
A reigning question of the moment is how the employee benefits market will change once the full effects of health care reform are felt in 2014. Will employers continue to offer coverage? Will they keep plan offerings in place, but share an increasing amount of the cost burden with their staff? Or will they turn their employees over to the shiny new health insurance exchanges?
These are all questions of value vs. cost. In the short-term, employers will certainly lessen expenses by dropping health care plans. In the long-term, though, how many valuable employees will they lose with a less attractive benefits package?
Across the board, employers may not realize just how important benefits are to employee satisfaction and retention. A recent study revealed that, post economic downturn, employees place a greater value on their benefits package when evaluating their overall happiness at work. Where employers perceived health care benefits to be valued by just 59 percent of employees, 75 percent said that health benefits were a key component to job satisfaction, ahead of other desirable qualifiers such as advancement opportunities, retirement benefits and company culture.
In light of stats like these, it may be wise for employers to keep this offering on the table. And in Michigan, at least, it seems that the majority of employers are planning to do so. A recent study conducted by McGraw Wentworth, an employee benefit brokerage/consulting firm based in Troy, Mich., showed that just 7 percent of southeast-Michigan based employers plan to discontinue offering health care coverage in 2014.
The survey examines health benefits and costs for the current year, including decisions made around health care reform, among 470 southeast Michigan-based employers with 100-10,000 employees.
These next few years will tell how these decisions will play out in other states. While it’s likely too early to make any truly accurate predictions, this early study is a favorable sign for benefits agents nationwide — who, much like the plans they sell, may very well see their services become increasingly valuable to employers and employees alike.
Tags: benefits, health care reform, health insurance exchanges
Posted in Employee Benefits, Health Insurance, Insurance Industry Issues | No Comments »
June 9th, 2011 by nmorford@sbmedia.com
Last week, the California Assembly took one more step toward increased industry regulation. Members voted 42–33 in favor of A.B. 999, a bill that seeks to place greater restrictions on LTC insurers and protect the public from unfair rate increases. Coming on the heels of what many already view as aggressive industry regulation, the bill was not a favorite among insurers, who argued that California regulators already have sufficient power to monitor and prevent unreasonable rate increases.
If passed as written by Assembly Member Mariko Yamada, D-Davis, Calif., the bill will mandate that insurers must wait either five or 10 years between rate-change applications, and will also change the way insurers measure loss ratios when applying for rate increases.
Other bill stipulations include:
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Limiting insurers’ ability to adjust rates based on investment performance |
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Requiring the state insurance commissioner to outline the coverage provided by each LTC policy on the web |
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Mandating that insurers show consumers the full policy language before coverage is purchased |
Among members of the state’s Insurance Committee, there was some conflict as to whether the bill should move forward, but it passed after a 7–5 vote. Meanwhile, state insurance commissioner Dave Jones wholeheartedly supports the bill, saying that unless A.B. 999 becomes law, “consumers can’t count on their premiums to remain stable from year to year.”
Other bill supporters maintain that, despite an existing law regulating LTC rate increases, there is still a substantial disconnect between what consumers expect to pay for coverage and what they actually pay. LTC insurers, they say, continue to underestimate the cost of providing coverage when new policies are introduced.
The bill now moves to the Senate. If passed, insurers warn that LTC premiums will raise across the board, with particularly large jumps in cost at the end of each 5- and 10-year period.
Tags: California, Long Term Care Insurance, LTCI, rate regulation
Posted in Insurance Industry Issues, Long Term Care Insurance | 2 Comments »
May 20th, 2011 by nmorford@sbmedia.com
It comes as no surprise that we in the U.S. spend substantially more on health care than any other developed nation. Still, the cold, hard numbers — as shown in a recent study put out by the Kaiser Family Foundation — are shocking. The significant spending gap, first measured in 1970, swelled in 2008 to 91 percent more than other developed countries around the world.
A brief history of numbers:
- When first measured in 1970, U.S. health care costs per capita were 58 percent higher than other wealthy countries, including Canada, the Netherlands, Switzerland, the United Kingdom and Japan
- By 1980, the gap had shrunk to 51 percent
- Just ten years later, in 1990, costs had soared to 86 percent higher
- The gap shrank slightly, to 84 percent, between 1990 and 2000, before climbing to 91 percent in 2008
This timeline is complimented by data showing how health care costs have devoured our national GDP: in 1970, the U.S. spent 7 percent of its Gross Domestic Product on health care, 37 percent more than other developed countries. By 2008, this number had risen to 16 percent, 58 percent higher than average.
So, what do we do with these numbers? Study authors suggest: “This growing gap between health spending in the U.S. and that of other developed countries may encourage policymakers to look more closely at what people in the U.S. are getting for their far higher and faster growing spending on health care.”
Judging from ASJ’s recent Health Insurance Market Study, many agents agree that a closer look is needed. When asked whether you supported the new federal health care laws, 51 percent of you said yes — although just 3 percent wanted to keep the laws in their current form.
Looking at the numbers, it’s difficult to deny that reform is needed. Looking at the Affordable Care Act, it’s difficult to deny that there are some substantial holes. How would you fix things? Drop us a line at Editor@SBMedia.com and let us know which direction you think reform should take.
Tags: health care reform, health care spending, spending gap
Posted in Health Insurance | No Comments »
May 3rd, 2011 by astonehouse@sbmedia.com
A couple of slow international news days made our attendance at this year’s AALU annual meeting in Washington D.C. (we are being ironic here) all the more interesting, and poignant.
The conference, an annual opportunity for the cream of the insurance and financial planning industry to make some direct contacts with those in the congressional arena, usually offers its own form of political drama; the news early Monday morning of the long-awaited eradication of terrorist leader Osama bin Laden served to considerably change the tone here in the nation’s capital.
Especially as former President George W. Bush was the meeting’s highest profile speaker, capping a list that also included appearances by comedian and media personality Dennis Miller, CNBC’s Ron Insana, author Steven Levitt and former New Mexico Governor and presidential candidate Bill Richardson.
Tuesday’s schedule saw the event turn toward its key mission, a series of “town hall”-styled meetings with congressional leaders. Called the “Capital Hill Club,” AALU’s concisely focused political efforts will see approximately 600 attendees boarding buses and heading to The Hill to meet with elected officials and try to spread an industry positive message.
David Byers, head of the AALU’s board of directors, explained that the organization’s hope is to be seen and heard at a level equivalent to the NRA or the AARP, with a focus distinctively on protecting and cultivating the interests of the insurance industry.
To that end, more than $2.1 million in contributions were made to the AALU’s political programs last year; this week’s event will see one-on-one meetings with the 150 members of congress who’ve been identified as having the most influence on legislation directly affecting our business.
Tags: AALU, industry politics, insurance legislation, insurance news
Posted in Insurance Industry Issues | No Comments »
April 26th, 2011 by astonehouse@sbmedia.com
Let us offer a quick invitation to those of you in the employee benefits end of the pool: Our 2011 Employee Benefits Survey is now available online and we’d love it if you could take a few minutes to participate. Agent’s Sales Journal is once again hoping to capture a comprehensive look at the sources you use for new prospects, the state of the benefits business and your plans for the year ahead. As an added bonus, we’re offering an Amazon Kindle to one of our survey participants. The survey will only take a few minutes of your time (we promise) and the results will be used for future stories, including our Selling Guide. Thanks.
Posted in Uncategorized | No Comments »
April 12th, 2011 by astonehouse@sbmedia.com
Let us take a brief moment to blow our own horn here at Agent’s Sales Journal, in light of an exciting recent announcement about one of our online initiatives. In a ceremony held in New York City on March 10, ASJ was named a Jesse H. Neal Award winner for our Social Media Boot Camp series, grabbing the glory in the Best Educational Content category.
The Neals, while not as well known as the Oscars, are an equally prestigious award program in our own business magazine world, having been established in 1955 by American Business Media. In recent years, the awards have expanded to reflect the growth in B2B magazines in the online world, and we’re rather gratified to have been honored for our endeavors.
If you haven’t checked out our series, please do so (a full PDF download of the series is available at the hyperlink above). We initiated the Boot Camp as an effort to more comprehensively guide our readers through the very basics of social media, recognizing that many of you may still just be in the beginning stages of your own website, your Twittering, Facebook and LinkedIn use, all of it with an eye to compliance issues.
In just 20 days, we were able to help agents from square one to becoming accomplished masters of their own online domain. Look for more, equally inventive and sales-worthy online initiatives in the year to come.
Tags: Agent's Sales Journal, Links to the ASJ site, Neal Awards, social media
Posted in Insurance Industry Issues, Insurance Marketing, Insurance Technology | No Comments »
February 8th, 2011 by Christina Pellett
Yesterday, the long term care insurance world received news that yet another carrier would be leaving its midst by the end of 2011: Guardian Life Insurance Company of America, which has sold individual LTCI through its Berkshire Life Insurance Company of America unit since 2004, has reviewed its position in that market and has decided to abandon it in favor of its core life and DI business.
At first blush, this has little to nothing to do with independent agents. Yes, this is the second carrier within months to shutter its LTCI business. And yes, John Hancock and Genworth individually made announcements that they would raise rates on in-force policies. John Hancock even suspended its group sales last September as it re-evaluates its current small and large-group pricing and design. (Editor’s note: We originally misstated the status of John Hancock’s group LTCI division, and have corrected our statement above)
Yet as a captive company, Guardian’s actions really only affect its career agents, most of whom probably won’t care anyway. This simply heralds a normally focused company’s exit from what amounts to a short-lived experiment.
Or does it?
Industry experts say that all of the recent LTCI market turmoil has been a result of early pricing missteps: Carriers miscalculated just how many people would actually need benefits through these policies. I guess they figured that most people would bail on their premiums or die before they actually needed care.
But the industry seems to have done too good of a job marketing the need for these policies. It also did too good of a job publicizing that younger applicants would pay a lower amount for coverage, urging the under-50 set to snap up long term care coverage before their health deteriorated and rates skyrocketed. If greater numbers of younger consumers are entering the system and paying comparatively less for coverage, how much money will there be to go around once the older policyholders start entering nursing homes and hiring home health aides?
I have to wonder how much of this activity might come from sheer panic for what awaits company coffers once baby boomers start actually using the long term care coverage they purchased just as it was gaining traction. In other words, is all this rate hiking and market exiting reactionary, or preparatory?
Whatever the background, and however justified the exit, if this continues, your clients will have fewer and fewer options for coverage at the time that the need for long term care continues to become greater and greater. It’s doubtful that fewer companies will mean fewer competitors for you, but it may mean less flexible options and less attractive pricing models. Producers on such sites as insurance-forums.net debate the future of long term care insurance (Traditional LTC? Worksite? Combination policies?) and industry advocates also tout a variety of long term care flavors as being the Next Big Thing.
One thing is for certain: Unless the major players remain in the market and continue providing coverage options for tomorrow’s long term care patient, we may be facing an entirely different health care crisis in 30 to 40 years.
Posted in Uncategorized | No Comments »
January 21st, 2011 by Christina Pellett
I always struggle when it comes time to story plan for our annual critical illness feature. The product is a logical one — it offers lump sum payments to victims of heart attacks, strokes, and cancer, along with such conditions as Alzheimer’s and kidney failure. It’s also affordable — premiums may be as low as $20 per month for some policyholders. And it’s relatively simple to obtain, with most companies offering simplified underwriting and jet issue for lower-end policies.
Then why is it still such a relatively unknown product? In 2009, voluntary critical illness sales represented only 2 to 4 percent of total voluntary sales, while cancer insurance stood at 8 percent, according to Eastbridge Consulting, even though CI sales had increased nearly 88 percent between 2008 and 2009, and cancer sales had dropped by 8 percent.
CI clearly has a lot of catching up to do: Since it debuted on the U.S. market in1998, just 60,000 individuals have purchased critical illness. Of those, according to the American Association of Critical Illness, 24 percent of individual and 65 percent of voluntary buyers opted for $20,000 or less worth of coverage.
Yet it’s clear that critical illness presents an unparalleled opportunity for insurance agents in all lines of business. While conducting interviews for this year’s critical illness feature, which will run in print and online in April 2011, J.R. Jordan, senior vice president at Colorado Bankers Services, explained why.
- Annuity producers and those in wealth accumulation sales can protect their clients’ investments, ensuring they don’t have to dip into their accumulations to pay for treatment of a critical illness.
- Life insurance agents who sell high-premium permanent life insurance can offer critical illness on a life insurance chassis, which will pay a lump sum to survivors and a death benefit to beneficiaries if they do not survive.
- Those in mortgage sales with a health and life license can sell CI to prevent clients from foreclosing because of high medical bills.
- Health insurance agents can get behind a product that offers additional income for them and additional protection for clients.
This last point is especially important given the environment in today’s market. With PPACA aiming to provide coverage for all, that coverage may not be all that we had hoped. As catastrophic treatment becomes more difficult to obtain, critical illness can fill that gap. The product is already most popular in countries with nationalized health care or health care reform — most notably, Great Britain and Canada.
It just may be that the critical illness market is poised for a takeoff.
Do you sell critical illness insurance? What have you found to be the most successful? And if you don’t sell it, why not? Share your experience in the comments below.
Posted in Uncategorized | 1 Comment »
