In the wake of Health Care Reform, We, as Health Insurance Producers, find ourselves in an interesting place. Insurers, no longer know how to compensate us. Due to the medical loss ratio standards that go into effect on January 1, 2011, we are all in limbo.
Let me explain, as a producer, I get paid a monthly fee for service for every policy I write and is excepted by the policy holder. Now I get this amount every month for one year. Here is where it gets interesting. Most insurance carriers cannot meet the requirement beginning January 1, without adjusting “commissions”.
As a Self-Employed business owner, I have to run my life and my business based upon what is coming in. If I know I am going to make say $20 per month on a policy for a year I know how many I need to sell each month. EXCEPT NOW, that $20 I get now, might be $9 come January 1. Take that times maybe 100. On these simple numbers it is a DECREASE in compensation of about $1100 per month.
Most of us would not go to work not knowing how much we get paid. But that is what the United States of America, Our CAPITALIST system, and our industry has to go to work for the next 5 months and not know how much we are getting paid.
The insurance carriers have said they will let us know on December 1, 2010. Now if it was on policies going forward from Januray 1 on, I could live with that. And for that matter, I guess I have to live with it anyway.
As producers, we are faced with a serious question… WHAT DO WE DO NOW???
We can go on as business as usual and HOPE, everything stays the same. We can not spend as much time with our existing clients and not give them the service they deserve, so we can find say 60% more clients next year to offset the pay decrease.
We can add more lines of insurance. Again, this takes time away from our existing clients, but maybe we can help the existing clients in another way.
Many have already left the business, creating some additional opportunities.
WHAT would you do??
Could this happen to your industry?? The Government has taken over the Auto Industry, and just passed a Financail Reform bill. What is next??
Could you be next??
Somethings to think about.
Thanks for reading.
Eric Wilson is the President of I Sell Health, Inc. A Chicago area company. He services clients in Illinois, Ohio, Indiana, and Wisconsin. He can be reached toll free at 888-448-5370. You can email him at firstname.lastname@example.org or visit online at www.isellhealth.net