As a broker, you probably thought this would be the slow time of year. After all, it’s not the 4th quarter, the busy time for group health agents. Or the Annual Election Period, when Medicare agents do the bulk of their business. Or the open enrollment period in the individual market. These are supposed to be the dog days of summer.
Well, think again. The King v. Burwell ruling on June 25th, which confirmed that the premium tax credits are available nationwide, was just the beginning. The same sex marriage ruling the very next day is also having a big impact on our business. And this month we’ve seen three huge health insurance mergers in the industry, each one bigger than the last. Here’s the quick recap:
On July 2, Centene announced that it would purchase Health Net for $6.3 billion. Centene focuses on Medicaid business, and the acquisition of Health Net will help it move into the Medicare market while strengthening its presence in California and other western states. Then on Friday, July 3, the news hit that Aetna would be purchasing Humana for $37 billion, in large part because of Humana’s successful Medicare business. This was the biggest acquisition ever in the health insurance industry and would make Aetna the second-largest insurance company in the nation behind UnitedHealthcare. However, just three weeks later on July 24, we learned that Anthem will purchase Cigna for $54.2 billion, making it the largest carrier in the nation. UHC will move to the second spot and Aetna will be third.
Of course, that may not be the end of all the deal-making. UHC’s also been looking for someone to purchase, so we’ll see what happens.
What does this mean for brokers?
The big question for our readers, though, is how this will impact brokers and their clients. The question about our clients is a tricky one since nobody really knows at this point. Most would agree that less competition and fewer choices for consumers is generally a bad thing, so that’s a good reason to be pessimistic about all of this M&A activity. On the other hand, bigger carriers can have more of a national presence and have more negotiating power with doctors and hospitals, which can help consumers save money on both premiums and cost sharing. We’ll have to wait and see how it all shakes out.
For brokers, this is a time of change in the industry, and change creates opportunity. It gets people talking about health insurance, and the millions that are affected by the mergers will certainly wonder if they need to shop for other coverage. Whether they really do or not is beside the point – they’ll consider it, and that will open the door.
And at a time when so many people could be switching plans, brokers need to be as efficient as possible. You need to spend all of the time you can drumming up business, getting in front of as many people as possible. Every minute you spend face-to-face with an individual prospect is a minute that could have been better spent talking to multiple prospects. With fewer plans to choose from, helping the client select a plan is not the “highest and best use” of your time, so you need to delegate it to someone else. That’s where HPA can help. By setting up your own private exchange website through Health Partners America, you’ll have the technology that will allow prospects to compare their options quickly and easily. But because healthcare shoppers still want the human touch, someone who can answer their individual questions, we pair the technology with a world-class call center staffed with licensed agents that can handle the volume of leads you send their way. It really is a better way to do business and will help you avoid the time drain of individually enrolling every single person. That’s what your competitors do, and it’s why they won’t be able to take full advantage of this opportunity – and you will.