Insurance Networking News: Younger Insureds Prefer Agents

The Kids Are Alright With Agents

Accenture survey finds younger consumers still prefer to purchase insurance through agent networks.

Insurance Networking News, May 25, 2011

Bill Kenealy

While nobody can dismiss the progress the insurance industry has made developing distribution channels to reconcile with the tastes of millennials, a new survey from Accenture suggests these new channels will augment rather than supplant long-established ones.

The survey, which queried 2,500 individuals in North America, found that the agent network remains the preferred method to buy insurance among respondents. Indeed, even among 25- to 34-year-olds, 59% said they prefer buying insurance from agents as opposed to the 31% who indicated a preference to purchase online.


Nonetheless the numbers indicated a proclivity for younger consumers to use the Web and social media as a research tool. For example, 75% of 25- to 34-year-old respondents said they would be interested in using insurance aggregators prior to buying a policy, while only 55% of the entire sample population expressed an interest in doing so.

“With the rise of Internet usage, new purchasing behaviours have emerged that insurers cannot ignore,” says Erik Sandquist, a senior executive in Accenture’s Insurance practice. “Before buying, more and more consumers perform their own research online, compare options and seek recommendations from others, using social media sites or referral sources. This is very common in sectors like travel and electronics, but our survey demonstrates that insurers should expect similar purchasing behaviours from their customers.”

Sandquist adds that insurers will need to re-examine their technology stacks and product mix to ensure they are to best serve these multiple distribution channels.

“While our research points to significant opportunities for insurers who can reach consumers with the right products through the right channels, the personal lines insurance market remains extremely competitive,” he says. “Our survey shows that consumers want speed, products that fulfill their needs and competitive and transparent pricing. It is increasingly important for insurers to align their channels to meet these rising expectations.”


DC Commissioner White Featured by NAIC

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Politics, The President and the Ryan Plan

I’m ambivalent about all the recent reporting on the increasingly controversial plan put forth by Rep. Paul Ryan (R-WI) to reform Medicare. I believe that both President Obama and Rep. Ryan provide credible approaches to bring runaway Medicare spending under better control. But they come at the problem from opposite philosophical directions – one is highly centralized and insular, the other places a heavy financial burden on seniors to help sweat costs out with their own high-stakes health care purchasing choices.

It is, in fact, a political myth to present all of this as a choice between the “kill granny” Ryan plan and the unfettered fee-for-service Medicare coverage – rich coverage — enrollees now know and love. The latter is simply going away: the federal reform law already on the books establishes a 15-member Medicare independent payment advisory board that will make decisions largely free of political interference about who will get what health care and how going forward. There may be ways in which these 15 sages can slay Medicare’s cost drivers without reforming the way it is financed and providers are paid, but if so they will need to be both very brave and very clever.

The Ryan proposal does shift too much of the burden to aging health care consumers, and in this respect it is too much too soon. But some variation of its core element of premium support is neither new nor especially radical. Clinton administration budget official Alice Rivlin, among other serious health care thinkers, have proposed premium support as a valid mechanism to help introduce demand discipline into the entitlement health care system.

My main point is that there is no reason we could not do both, along with some strong, well-structured market incentives to revamp our ancient fee-for-service health care reimbursement system – of which Medicare is Exhibit A. (Much of the private market follows Medicare, which is why the stakes are so high.)

The truth is that Medicare is a program essentially built on a 1965 payment model, and that needs to change before we go broke trying to tinker around its edges. Ryan and Obama could probably sit down and negotiate effective reforms in a few days. But that’s not the way the game works yet. Eventually, they (or their successors) will have to. As Nixon administration economic official Herb Stein once simplistically pronounced, “trends that can’t continue, won’t.”

It’s how the cost curve will be bent that will determine whether the necessary changes are ultimately effective and sustainable. Obama’s advisory board is politically viable now, but wait until they start saying no to treatments and medicines that physicians and their patients demand. Ryan’s Brave New World is just that, and therefore now a political non-starter.

Somewhere down the line, the two approaches will probably need to get better acquainted.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Employee Benefit Advisor: Federal Exchange Rules Expected This Month

State exchange regs expected in June

By Marli D. Riggs
May 24, 2011

Regulations on PPACA’s state exchanges are expected in June, according to Mark C. Nielsen, an attorney with Washington-based Groom Law Group. Nielsen spoke Monday at the Washington Legislative Update held by International Foundation of Employee Benefit Plans.

Nielsen stresses that it’s pertinent for employers to take a look at the exchange regulation – which may run 1,000 pages – when it comes out. “It may be painful to go through (but) that is going to be the place where (the Department of Health and Human Services) is really going to start taking its hand as to what types of federal regulations or what type of federal floor it will be setting on these exchanges. I think any type of employer coverage that is going to be offered post-2014 will have to take a look at what kind of coverage is offered on the exchange because that is what employees will potentially be looking at and saying, ‘If I’m eligible for something I could get better coverage there.'”

Nielsen explained what will be needed with the 2014 exchanges. “There’s a huge number of regulations that we will need, there’s a lot of IT components that go into it, it’s going to cost billions of dollars for the federal government to get these programs up and running. Regardless of rather you like the law or not, the bottom line is unless there is something to replace this law, come 2014 if this law is still on the books, then the exchanges have to be up and running and functional.

“It’s going to be a really tough world in 2014. The upside though is that there is flexibility particularly with self-funded plans in the post-2014 world that is not available for coverage on the exchange,” he says. “Self-funded plans are not required to offer coverage of essential benefits,” as defined by PPACA. “I would start with the exchanges and hold on tight for a fun ride with HHS,” Nielsen says.

On May 19, HHS issued proposed regulations
requiring that, beginning in September, health insurers seeking to increase their premium rates by 10% or more will have to notify the state, and in some cases the federal government, of the proposed rate and the state has ultimate authority whether or not to approve it. “Health and Human Services doesn’t have the right to reject the rate but they can determine that it is unreasonable and they will post it on their website,” Nielsen says, and this means insurers have to post it on their site as well.

“It’s a lot of pressure on insurers to try to deal with this,” he says, “The rate regulation also requires any state in the process now for rate approval is going to be required to allow input from the public as to the reasonableness of rates.”

Source: k

Kevin Wrege, Esq.
Founder & President
Pulse Issues & Advocacy LLC
Office: 202-625-1787
Mobile: 202-253-4929
4410 Massachusetts Ave., NW, #150
Washington, DC 20016

DC Council Draft Committee of the Whole Report on Bill 19-203, the Fiscal Year 2012 Budget Support Act of 2011 (BSA)

From: Budoff, Jennifer (Council)
Sent: Tuesday, May 24, 2011 9:32 PM
To: Members and Staff (COUNCIL)
Subject: Draft Committee of the Whole Report on Bill 19-203, the Fiscal Year 2012 Budget Support Act of 2011 (BSA)

Council of the District of Columbia

Committee of the Whole

1350 Pennsylvania Ave., NW, Suite 508, Washington, D.C. 20004


To: All Councilmembers

From: Chairman Kwame R. Brown

Date: May 24, 2011

Subject: Draft Committee Report on the BSA

Please find attached the draft Committee of the Whole Report on Bill 19-203, the Fiscal Year 2012 Budget Support Act of 2011 (BSA), and the draft committee print.

This is a transformational budget. I am confident that history will record this budget as a defining moment where the legislature has done the right thing. It was crafted with the understanding that we cannot fix or fund every program needed.

There were many tough choices made to address the District’s difficult. After many discussions with the Executive, my colleagues, and the Chief Financial Officer, we have constructed a balanced and responsible Fiscal Year 2012 budget request.

Through hard work and cooperation, we have found ways in this year’s draft BRA and BSA to restore many painful cuts. This budget restores funding to the critical social safety net services, such as shelters for families and homeless services. It also fully funds the WMATA subsidy.

In summary, this budget protects our residents’ priorities: education, economic opportunity, and safety. However, now is the time to move forward to reduce the size of government while continuing to provide more quality services for our residents.

I would like to take this opportunity to thank my colleagues and the entire staff of the Council for all of their dedication and hard work to get us to this point. I look forward to the Additional Committee of the Whole meeting scheduled for 9:30 a.m. in the Council Chambers tomorrow. Should you have any questions, please do not hesitate to contact me.

BSA 1 – FY12_BSA Draft Committee Report 052511.pdf

BSA 3 – B19-203 FY12 BSA – draft committee print.doc

CQ: NAIC Considers Agents & Exchanges

May 19, 2011 – 5:28 p.m.

State Insurance Regulators Mull Roles of Agents, Educators in Exchanges

By Jane Norman, CQ HealthBeat Associate Editor

State insurance commissioners are treading carefully as they work to define the roles of those who sell health policies and the people who will educate consumers about insurance when the health care law goes into effect.

A subgroup of the National Association of Insurance Commissioners (NAIC) on Thursday approved a draft “white paper” that tries to spell out some of those definitions in an effort to help state legislators create their health benefits exchanges.

But it’s a tricky task for the state regulators, and one that’s already provoking disputes among state lawmakers working on legislation creating their exchanges.

In a discussion during a conference call Thursday and in comments submitted for the paper, it’s clear insurance brokers and agents remain deeply worried about intrusions on their traditional turf when individuals and small businesses start buying their insurance through the new state exchanges in 2014.

The exchanges represent a potential vast new market of millions of customers who will get coverage under the law. And brokers already have suffered one defeat when it comes to preserving their livelihoods, under a separate HHS regulation on medical payouts created by the law.

The insurance salespeople want the educators — or “navigators,” in the parlance of the health care law — to be subject to state regulations, licensing and oversight, says a comment letter to NAIC from the Independent Insurance Agents and Brokers of America.

Any person, whether a traditional salesperson or a navigator, should have to get an insurance producer license to order, sell, solicit or negotiate insurance, offer advice, or enroll people or businesses in plans, they say.

The advocacy group Families USA, though, says in a paper analyzing the issues that navigators will need training different from that of producers, and “today’s licensure requirements for brokers or agents are not the appropriate vehicle to ensure navigators’ competency.”

As for NAIC, it appears to be sure that it wants to preserve the role of those who sell insurance, or producers, as they are known in state law. “Producers Will Play a Crucial Role in the Success or Failure of an Exchange,” says one heading in the white paper.

“Producers have a significant relationship of trust with the individuals covered by both the individual market and the small employer insurance market,” the paper says. Those producers who understand the exchanges and how they work can increase public awareness of the exchanges and step up traffic to them, the paper adds.

The NAIC white paper now will be forwarded on to a larger NAIC committee, where it’s expected to undergo some revisions again, and eventually will go to the full membership for approval. Regulators also are awaiting HHS regulations on navigators and other exchange details. The regulations are expected in June or July.

Maryland Insurance Commissioner Beth Sammis suggested during the NAIC conference call that the white paper be clarified so that it describes the navigators and the producers as having complementary roles, rather than an “either-or” description.

And Kansas Insurance Commissioner Sandy Praeger said that she envisions the navigators as similar to states’ Senior Health Insurance Information Programs, which use trained volunteers to help seniors understand their Medicare health insurance choices.

The health care law (PL 111-148, PL 111-152) specifies that each exchange must award grants to navigators whose duties will include conducting public education activities, distributing “fair and impartial” information on enrollment in health plans, “facilitat[ing]” enrollment into plans and providing referrals for consumers with complaints.

Navigators may include trade, industry or professional groups; unions; chambers of commerce; licensed insurance agents; or other groups, as long as they provide fair and impartial information, the white paper says.

But navigators can’t be health insurers, and they can’t receive compensation directly or indirectly from insurance companies in connection with enrolling consumers in plans.

Producers, on the other hand, have long been defined and regulated in state law and generally include individuals or health insurers who sell, solicit or negotiate contracts, and the term is used in many states to define both agents and brokers, says the white paper.

The white paper says that the health care law doesn’t really distinguish the roles of producers and navigators, and states will need to evaluate how each group should be regulated.

NAIC says the issues include:

  • How will the HHS regulations on exchanges affect the oversight and roles of producers and navigators?
  • Should states license or certify navigators?
  • Who will establish the educational and continuing education for navigators?
  • How will navigators be held accountable for errors?
  • Are navigators expected to help people enroll in public programs like Medicaid?
  • What funding sources will exchanges use for navigator programs?

The NAIC is still expected to take up separate white papers on exchange issues including governance, financing and adverse selection.

Source: CQ Online News
Same-day coverage of the people and events shaping health care policy from Washington.
© 2011 CQ Roll Call All Rights Reserved.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Upcoming DC Health Care Reform Forums

Attached are notices for two upcoming health care reform conferences open to DC health care consumers and other health care stakeholders.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

AARP HC Conference 5.20.11.pdf

DCIF HC Session 5.26.110001.pdf