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Even when business is tough and consumers are becoming more selective, there is still a huge potential for agents to increase their commissions and customer portfolios. Plus, for those who are producing more, insurers are beginning to give better leads and the tools to continue to grow their business. "It’s increasing optimization. It’s increasing productivity. For good agents with talent, I would see the opportunities increasing," Marie Carr, principal at PricewaterhouseCoopers Diamond Advisory Services said. Insurers are doing only slightly better than the financial world in this economy; and, they are leaning toward giving more support to those agents writing more business, more profitable business, and more lines of business. Thus, overlooking agents who are not as high of producers. Carr explains, "They’re refining their portfolio of agents."

In recent years consumers have begun to purchase insurance in less traditional ways, selling Medicare Supplements over the phone and online. The pressure is on for agents to keep up with advancing technology. Technology is available to help agents enhance their business relationships, via social networking and online tools, and it will continue to drive business. It’s also important to continue to re-evaluate and define the value of your experience and services to your prospects. Consumers still want to be supported as they make their insurance decisions and it is up to agents to find their niche in the buying process. Once your prospect has become a client, personalized contact is definitely a great way to continue correspondence including handwritten notes, mailers, follow-up calls, and personal visits. Making sure your clients are happy and that they are getting what they need out of their policy is also a great way to continue to get referrals.

The role of the insurance agent is continuing to evolve, spurred from recent advancing in technology and customers looking for the best deals during the recession. Carr states, "I don't believe the agent is going to go away, but i do believe the agent as we understand him or her today is going to be dramatically redefined."

Please give us your feedback!
Do you see insurance companies favoring those producers with more business? How has the recession affected your business? What have you done to keep your business successful during the recession?

Source: Agent's Sales Journal

On March 27th, the Professional Health Insurance Advisors Task force, part of the Executive Committee at the National Association of Insurance Commissioners (NAIC), is planning to hold a hearing on producer compensation in Austin, Texas. During the hearing the task force is requesting comments from all interested people on the following questions:

• What is or is likely to be the impact of removing commissions from what is defined as premium under the MLR requirements?
• Have commissions been reduced since the passage of the federal law? If so, what is the impact of present and potential future commission reductions? Will this cause access issues? Is it likely agents/brokers will abandon health insurance markets?
• What will be the impact of a legislative change that treats producer commissions in the same manner as federal and state taxes for purposes of calculating the MLR?
• What is your opinion on the optimal solution to balance health plan/insurer concerns, consumer interests and the interests of agents/brokers?

Please give us your feedback!
Do you currently write underage health insurance? If passed, how will the new MLR requirements impact your business model?

Sources: National Underwriter, Employee Benefit Adviser, National Association of Health Underwriting, National Association of Insurance Commissioners

Last month the Center for Medicare and Medicaid Services (CMS) announced that the government would increase Medicare Advantage spending by 1.6% for 2012.  Primarily this increase is caused by a bonus payment program, controlled by the Affordable Care Act, created to improve the quality of care for people with Medicare by giving financial incentives to Medicare Advantage plans.  Those plans with a four or five star quality rating will get a higher payment; as well as, some counties getting more than others.  The CMS will also offer a special enrollment period in 2012 to help beneficiaries switch to a five star rating plan at any time during the year.  This increase also takes into account the changes to Medicare Part D for those seniors entering the “doughnut hole.”  These beneficiaries will receive a 50% discount on brand-name and 14% on generic prescription drugs, doubling what the program currently pays.  The unexpected news sent HMO stocks up in after-hours trading.  The final rate notice will be available April 4, 2011.

Agenda behind Medicare Advantage 2012 Increase Not Entirely Altruistic

The increase was decidedly unexpected and is now seen as a way to keep seniors happy through the 2012 elections. The Wall Street Journal reports, "The White House has apparently decided that it won’t enforce the unpopular parts of its health-care plan until after the 2012 election." Since seniors are the largest group of voters, this increase is seen as another temporary concession based on the public mood and to keep them happy in the election year.

Democrats dislike Medicare Advantage and Barak Obama vowed to eliminate the program when he said "We shouldn’t be rewarding the insurance industry for deceiving and defrauding our seniors" in 2007. Republicans like the program, showing that market pricing and competition are a better alternative to the government control of Medicare and that of the proposed health care law restrictions. Also, it is similar to the Medicare voucher program proposed by Paul Ryan. Ultimately, if the health care law goes though as it currently states, Medicare Advantage proposed cuts of $136 billion over the next ten years will have to go into effect as well. Meanwhile, the number of seniors in the Medicare Advantage program continues to grow, increasing 7% last year to 26% of Medicare beneficiaries.

What do you think about the proposed increases for Medicare Advantage as a way to keep voting seniors happy in an election year? Do you think it will work? Share your opinion in the comments.

Forethought Life Medicare Supplement Available in Nebraska and North Dakota

Effective March 9, 2011 Forethought Life Medicare Supplement is now available in Nebraska and North Dakota – please see the Forethought Nebraska Rates & App and the Forethought North Dakota Rates & App.

Woodmen of the World/Assured Life Rate Adjustment

Effective May 1, 2011 Assured Life Medicare Supplement rate adjustments for standardized plans in Alabama, Arizona, Illinois, Ohio, Oklahoma, Pennsylvania, Texas, and West Virginia; Medicare SELECT plans in Ohio, Pennsylvania, and Texas; and, Woodmen of the World standardized plans for Oregon, Utah, and Washington. Please see the WOW/Assured Rate Adjustment for May 2011.

Sources: MedPage Today, National Underwriter, Wall-Street Journal

On Thursday House Budget Committee Chairman Paul Ryan promised to include his Medicare voucher program in his budget cut proposal. The voucher program is controversial and Ryan was firm, stating that those 55 and over will still receive their benefits as they are today. However, in his proposed program, those currently 54 and younger will receive a voucher to buy their own private insurance once they become eligible for Medicare. The voucher amount will depend on a person’s income and health status, with those who have a higher income receiving less.  Those with incomes between $80,000 and $200,000 would get half and those with incomes above $200,000 would get 30% of the $11,000 proposed per-person allocation. He explained this is what Medicare typically pays per beneficiary now and if a person becomes ill and needs more care, more help would be available. Also, the amount would increase with inflation and take both the consumer price index and the medical component into account. If a beneficiary should choose a less expensive plan they could save the extra money in a medical savings account for future medical costs or long-term care insurance. However, a study done by the Pew Research/National Journal found that 69% of people 65 and older (of both parties) oppose replacing Medicare with the voucher system.

What do you think of the proposed Medicare voucher system? How do you think this will affect Medicare Supplements? Will supplemental insurance be sold by the same private insurance companies who accept the vouchers in conjunction with those plans?

House Speaker Boehner Tackles Entitlement Spending

IRepublican Speaker John Boehner has promised President Obama he will stand by him during the political backlash expected by proposing strong cuts to Social Security and Medicare. Boehner acknowledged that Americans have no idea how large the financial problems are for these programs. However, he states that once they understand they will be more willing to accept taking spending precautions in order to keep the programs available for future generations, no matter the iteration. With Social Security, Medicare, and Medicaid taking more than 60% of the national budget, trustees estimate they only have sufficient funds to cover Medicare to 2029 and Social Security to 2037. Boehner urges that raising the debt limit is the best way to prevent our economy from going into a tailspin. He also has made it clear Republicans are not going to offer a detailed plan anytime soon. The budget will have cost containment goals, but no clear way on how to achieve them. The Hill noted, Boehner does promise “Republicans will not exploit entitlement reform for political gain if Obama shows leadership on curbing the cost of Social Security.”

Two-Week Budget Extension Signed

On Wednesday, President Obama signed a bill to keep federal agencies open thru March 18, after the Senate’s bipartisan vote to extend spending cut talks. After signing the bill he urged any budget agreement should "cut spending and reduce deficits without damaging economic growth or gutting investments in education, research and development that will create jobs and secure our future." The House takes the position that they already passed a $61 billion package of cuts to cover the remaining seven months of the fiscal year while the only legislation the Senate has produced is the temporary budget measure. Still, Senate Democrats are urging Republicans to bargain and work out a deal to finance the government through September 30th and go beyond to take on larger budget questions. Even with the White House jolting Congress into talks, having a compromise by March 18th seems lofty and it is predicted at least one more extension bill may be necessary to reach a consensus.

Forethought Medicare Supplement Now Approved in Nebraska

Forethought Medicare Supplement is now approved in Nebraska. Please contact your marketing representative at 1-800-998-7715 for more information.

Sources: KHN, The New York Times, Forbes, The Hill, The Wall Street Journal