There are a lot of articles and blogs discussing the particulars of the new health care bill. I’m not going to include that here. If you want details of the bill, or perspective to give to clients, check out Broker Briefcase for the latest Legislative Brief. Instead, I want to share with you a behind-the-scenes perspective.
On Monday morning as I drove to work, I heard our Wisconsin Senator, Russ Feingold, on the radio talking about how great this bill will be now that insurance companies are going to be forced to spend a certain percentage of dollars on claims. His quote was, “Now we won’t see them building big glass buildings in some of our biggest cities anymore.” Clearly he has no understanding of investing part of mandated claim reserves into real estate. When I was a rep at Metlife, the headquarters were located at One Madison Avenue in New York. Very cool. However, it wasn’t well known that Metlife rented out the majority of the building. While it was an expensive address, the real estate served as a profitable asset funded by claim reserves portfolios.
When I arrived at work, I had a voicemail message waiting for me from a relative who was very much in favor of reform. His message stated, “Now watch the insurance carrier’s stock plummet — that should teach them.” Of course, as predicted by industry experts, the legislation’s passage potentially introduced 30 million new customers, thereby causing not only insurance carriers’ but hospital systems and pharma stock prices to rise.
It appears that many of the supporters of this bill were lacking accurate information. While this bill may be the ultimate power grab in DC, it ultimately has no “grab” with leaders in our industry. There may be good provisions to the bill, but the end result as we all know was health insurance reform rather than health care reform.
According to Business Insurance, several organizations in our industry have weighed in as follows:
– The Independent Insurance Agents & Brokers of America and the Council of Insurance Agents & Brokers expressed “disappointment” and “concern” over the sweeping health care reform bill passed by the U.S. House of Representatives on Sunday.
– On Sunday, the Big I said it was “disappointed” with the bill’s passage, saying it does “little to stem the skyrocketing cost of health care” and that it will be financed “on the backs of small business during one of the most delicate financial periods in American history.”
– The IIABA also said it is disappointed that the bill contains no “meaningful attempt” at medical malpractice reform, which it contends will help bring health care costs down.
– Joel Kopperud, director of government relations for the Washington-based CIAB said the association is “concerned” about the impact the reform bill will have on the employer-provided marketplace.
Here is the behind-the-scenes part of the story. It would be typical to expect that given the legislation that passed, brokers would be upset and react unfavorably. They’re not. My office talks to hundreds of brokers a day. Here are messages that I have heard from brokers all over the country in the last three days.
“Just more legislation we will have to deal with.”
“Clients will need us more than ever.”
“Only thing we can count on in this industry is change.”
“We will have to adapt, but this will provide more opportunity than ever.”
“Prices are going up so they’ll be more opportunity to add value, be consultative and move to a fee based structure.”
“If you call me in three years and we haven’t tripled our revenue and staff, I’ll be shocked.”
Will it be business as usual? No. Is it ever? Our industry is going to go through changes. Brokers who just place business (and provide little value beyond that) will be history. Broker compensation will be different. Educating clients and post-sale service will be more difficult. Sales management and organic growth will be critical.
The reality is that brokers are the force that fuels the industry. As obstacles get thrown down – like water rolling down the mountain – brokers will find the best way to react, adapt and get the job done. It is an industry that is so good, billion dollar companies outsource their sales to brokers to drive their results.
As many of you know, Zywave was created as a proactive measure to help redefine the role of a broker. Quite frankly, it has not been about “placing insurance” for over a decade. Employers need guidance, help and information more than ever. When California tried insurance exchanges in the 1990s, over 80 percent of employers chose to pay 5 percent more in premiums for a broker due to their expertise.
The successful brokers get it and have been providing value add for years. Think about this a minute. When making a purchasing decision of something that affects not only your family but fellow coworkers, something you only do once a year, and something that is expensive and needs a lot of service to implement – how apt are you to use just a Web site and buy it? I’m sure the government is going to put together a real barn burner that will be easy to understand and use. Just like the tax code. Oh, wait – I hire a professional to walk me through that as well.
I want to thank the brokers I spoke with this week. The entrepreneurial spirit of the broker burns brightly and I want to reaffirm we are committed to you to provide the best tools, support and information to help you get out there and crush it. Chaos breeds opportunity. The question you have to ask yourselves now is how are you going to take advantage of it?
As we learn and changes become more evident, check back on AgencyFuel for suggestions and success stories from your peers. As always, if you have a viewpoint on this blog, by all means post a response. I would love to hear from you.