Nearly every day, we hear about another one of the ACA’s “Consumer Operated and Oriented Plans,” or co-ops, closing its doors. The headline of a recent article in the Daily Caller says it all: One-Third Of Obamacare Co-Ops Are Now Officially Dead.
These co-ops were non-profit start-up insurance companies that received seed money from the government under the health reform law, and the goal was to create some competition for the big insurance companies. Unfortunately, this effort seems to be failing. With all of the recent mergers and acquisitions, the big are getting bigger, and these small co-ops are having trouble gaining any traction in most markets.
To date, seven of the 23 co-ops approved by Health and Human Services before Congress cut funding to the program have either closed or announced that they’re closing, and an eighth appears to be going under.
So why is this an opportunity for brokers? Because anyone who signed up for coverage under one of the co-ops that is closing will need to find a new plan and because all of the publicity will likely scare some members of the surviving co-ops into hunting for new coverage. When people are switching plans, there’s an opportunity for brokers to pick up some new business.
In fact, any time there’s market disruption, that’s good for brokers who are able to help people explore their options. In addition to the closing co-ops and the M&A activity, we learned earlier this year that Assurant will exit the health insurance market, that carriers in multiple states eliminating their PPO network plans, and that UHC expanding into new markets.
Long story short, there will be a huge amount of movement this year among people who purchase coverage in the individual market, and brokers need to have a plan to capture as many of these leads as possible. Unfortunately, consulting one-on-one with every prospect you run across can’t be part of this plan if you want to maximize your time. That’s where a private exchange can help. It allows consumers to search for coverage, lets you capture their contact info, and provides you with a team of licensed insurance professionals who can close the sales. Open enrollment is just a few days away, so consider setting up your private exchange today.