This year, the doubts have fled, and brokers are assessing the risks posed by ACA and making plans for how they’ll deal with what more than half of them expect: falling commissions. The big question for brokers: Can they find a new role for themselves as consultants, facilitators, and value-added integrators?
Benefits Selling/Oliver Wyman 2013 Health Care Survey
Almost half of brokers say they expect to focus less on health insurance post-reform. We asked them what ancillary products they expect to be selling. Leading the list were the traditional products — disability, life, dental, and vision — with some further diversification into products like disease management, financial planning, and long-term care.
Broker Survey 2013
Source: Benefits Selling/Oliver Wyman
1What was the biggest difference in talking to brokers in 2013 compared to last year?
In last year’s survey, brokers and agents were mostly convinced that Obamacare wasn’t going to happen. Two-thirds of them thought it would be overturned or substantially scaled down. That has completely reversed. Now 80 percent of them believe that ACA will be implemented largely in its current form. Also, this year because of “leading edge” elements of reform entering the marketplace, brokers are already feeling the effects.
2What are the impacts of the new regulations allowing brokers to receive commissions on the exchanges?
We conducted the survey before that provision came through, but clearly the recent regulations should help keep brokers in the game. Brokers still have lots of concerns, however. The exchanges offer a new level of transparency and the potential for automated decision support, as well as convenience. The Obama administration thinks that people will still need the kind of help brokers provide. But we could all be surprised by how consumers engage with the marketplaces.
3Should payers be worried about brokers exiting healthcare?
In the short run, brokers overwhelmingly expect their relationships with payers to stay the same or improve. But they’re pessimistic about commissions. More than half expect commissions to fall. What’s more, 25 percent think that commissions will fall by 25 percent or more, with almost ten percent expecting the hit to be 50 percent or more. If payers weaken the economics of the channel significantly, they may lose the ability to use brokers as partners.
4What lesson should payers take from the survey?
Brokers aren’t bailing out. They’re hopeful about making money from advisory fees and cross-selling ancillary products. But they see lots of threats. And brokers are potentially important to payers. They have existing relationships with customers, they’re already playing an advisory role in the marketplace, and they will be allowed to recommend specific products on the exchanges. Payers need to consider how to build high-value partnerships that help achieve post-reform objectives.