Let’s face it – while most of us would have done things very differently if we had written the health reform law, there are still a lot of opportunities even in its current flawed format. Individuals are required to purchase health insurance, the government will help pay the bill, and they can’t be turned down or charged more for medical conditions. Common sense would tell us that this trifecta will lead to increased sales in the individual market and lots of money for brokers with the best enrollment solution. And now, three new reports support the prediction that this year’s open enrollment period could be even bigger than the last.
Forbes is reporting that Cigna has raised its earnings forecast because enrollment is up and claims from ACA-compliant plans are down. Earlier in the week, Aetna and Wellpoint raised their earnings forecasts as well. This is very good news because it indicates that the adverse selection a lot of people expected isn’t as severe as it could have been. Translated, that means that enough young and, more importantly, healthy people enrolled in individual plans.
The second piece of good news comes from Reuters, which says that “insurers planning to sell 2015 Obamacare health plans expect at least 20 percent growth in customers and in some states anticipate more than doubling sign-ups.” That’s huge, especially because this year’s open enrollment period is only half as long as last year’s. It’s also good news for agents since somebody has to sell those plans. To handle the increased volume, insurers in some states “have doubled or tripled staffing” and insurance agents have begun setting up private exchange sites to compete with Healthcare.gov or the state-based exchanges.
Third, because of the rosy forecasts, more insurers are throwing their hats in the ring this year. For instance, UnitedHealth Group, which was “barely on the exchanges in 2014,” will be in two dozen states this year according to Reuters. In all, Bloomberg reports that “77 new insurance plans will be competing for customers in 2015.” This increased competition has two effects: it gives consumers more choices, which makes them more likely to buy, but it also drives down prices. In an article titled “Obamacare Rate Increases Low as Insurer Competition Grows,” Bloomberg says that “Obamacare premiums, once predicted to skyrocket in the second year under the government’s marketplace, have risen about 6 percent for 2015.”
So, in summary, sales are up and claims are down, causing health insurance companies to increase earnings forecasts and expand into more states. This increased competition gives consumers more choice and lower prices. And brokers get to make a bunch of money signing people up. For those with a plan, this is a great time to work in the health insurance industry.