ACA Repeal Fails Once Again — Now What?

ACA Repeal Fails Once Again — Now What?

by Precise Leads

July 18, 2017

Though the measure may be shelved for now, the fate of federal ACA subsidies remains uncertain.

An effort in the Senate to repeal and replace the Affordable Care Act (ACA) failed to garner enough votes for passage as four Republican Senators announced they would not support the bill. Yet even before Senators Jerry Moran of Kansas and Mike Lee of Utah joined Rand Paul of Kentucky and Susan Collins of Maine in opposing the Better Care Reconciliation Act(BCRA), the Senate version was in jeopardy due to Sen. John McCain’s absence following surgery.

In response, Senate Majority Leader Mitch McConnell said he would submit a measure repealing the ACA outright “in the near future,” but delaying implementation of a replacement plan for two years. Several GOP Senators, however, said they would not support such an option. “There’s enough chaos and uncertainty already and this would just contribute to it,” Alaska Senator Lisa Murkowski told Bloomberg. Collins and Shelley Moore Capito of West Virginia also voiced their intention to vote against a repeal-only bill, casting doubt on whether that legislation could ultimately pass.

Will Cost-Sharing Subsidies Survive?

With BCRA apparently shelved for now, uncertainty surrounds one aspect of the ACA: the federal subsidies helping low-income enrollees pay for deductibles and copays. While President Trump in a Twitter post supported a repeal followed by a replacement, his administration has previously given mixed signals on the fate of the subsidies that are given to insurers.

In April, President Trump said he was considering withholding those payments as a way to engage Democrats in the healthcare reform process. Nevertheless, his preliminary budget included increased funding for the ACA’s cost-sharing subsidies. Likewise, the Senate package, as did the previous House version, set aside funds to shore up the ACA’s individual marketplace.

Comments from White House Press Secretary Sean Spicer in Bloomberg indicated President Trump remains undecided on whether to cut off the subsidies. “Of course it’s always an option,” Spicer said Tuesday (July 18). “We have a couple days left.” The deadline for making the next monthly payment is Thursday (July 20).

Health insurers countered eliminating the subsidies would deepen the confusion currently swirling in the individual marketplace and possibly hasten more providers to exit the ACA exchanges or raise rates. “Our members and all Americans need the certainty and security of knowing coverage will be available and affordable for them,” Justine Handelman, SVP of Policy and Representation for the Blue Cross Blue Shield Association, told Bloomberg.

If the administration suspends the cost-sharing reduction (CSR) payments, the Kaiser Family Foundation estimates silver plan (the plan level at which subsidies are available) premiums would rise an average of 19%. But the foundation added its calculations assume “insurers would be willing to stay in the market if CSR payments are eliminated.”

A Bipartisan Solution

After the latest setback for healthcare reform, lawmakers from both parties suggested a bipartisan solution may be next step. Most prominent among those voices was Senator McCain. “The Congress must now return to regular order, hold hearings, receive input from members of both parties, and heed the recommendations of our nation’s governors so that we can produce a bill that finally provides Americans with access to quality and affordable health care,” McCain said in a statement.

If a bipartisan agreement is reached, Republicans would have to bridge divides within their own ranks. Conservative senators want a complete repeal of the ACA, while moderate Republicans prefer to retain some parts of the ACA, such as protections for people with pre-existing conditions. South Carolina Republican Senator Lindsey Graham proposedkeeping the ACA’s taxes intact, but giving states more control over how those funds are spent.

For now, it appears unlikely the Senate will vote on a healthcare package anytime soon, although President Trump today (July 19) urgedGOP senators to come up with a plan to repeal and replace the ACA before the summer recess. “We have to hammer this out and not leave town,” he told the senators.

Other news reports indicate GOP leaders intend to focus on other legislative topics, such as tax reform and the debt ceiling. Given the recent history of healthcare reform on Capitol Hill, which had been declared dead only to be revived weeks later, insurance agents should keep up on the debate and possible changes to healthcare so they can inform their clients.

source: www.go.preciseleads.com

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Wells Fargo to Pay $80 Million for Forcing Unwanted Auto Insurance on Clients

Wells Fargo to Pay $80 Million for Forcing Unwanted Auto Insurance on Clients

by Precise Leads

August 1, 2017

Another scandal hits Wells Fargo as the banking giant gets caught overcharging customers for auto insurance.

Wells Fargo announced that it will spend $80 million repaying auto loan recipients after years of charging customers with unneeded auto insurance. A third-party report obtained by the New York Times revealed that the bank charged as many as 800,000 customers for coverage obtained through it, even if the customers already had auto insurance.

The issue stems from collateral protection insurance (CPI) sold to Wells Fargo auto loan holders. Since Wells Fargo requires auto loan recipients to have auto insurance, National General Insurance, the company underwriting Well Fargo’s policies, researched whether its borrowers owned car insurance; if they did not, National General then charged them for needed coverage, adding to the premiums and interest on the loans. 

Many Wells Fargo customers with auto insurance, however, were also charged without their knowledge, with the bank automatically subtracting the fees from their bank accounts. In addition, Wells Fargo breached disclosure regulations in Arkansas, Michigan, Mississippi, Tennessee, and Washington by not informing customers beforehand of the lender-placed insurance policy. About 100,000 policies in those states violated the disclosure requirement, a third-party report done for the bank by consulting firm Oliver Wyman found.

Affected Customers in Dispute

Due to the overcharges, approximately 274,000 Wells Fargo auto loan customers fell into delinquency, with nearly 25,000 having their vehicles illegally taken, according to Oliver Wyman. Although the bank initiated the review, a Wells Fargo spokesperson told the New York Times that the Wyman report’s numbers were higher than its own calculations. The bank said that only 570,000 customers qualify for refunds, which the bank will begin next month, and that only 20,000 auto loan holders saw their cars wrongfully repossessed.

Well Fargo further determined that 60,000 customers in the five states where prior disclosure is required were not given notification. It also announced that it will correct any customer’s credit history if that person was falsely deemed delinquent.

After receiving complaints, Wells Fargo launched a review in July 2016 of policies written between 2012 and this year, and notified its regulatory agency, the Office of the Comptroller of the Currency, of the investigation at that time. It discontinued the CPI program in September, effectively acknowledging that its oversight was lax. “Upon our discovery, we acted swiftly to discontinue the program and immediately develop a plan to make impacted customers whole,” Franklin Codel, Head of Consumer Lending for Wells Fargo, said in the statement.

Another Blow for Wells Fargo

The auto loan insurance overcharges dovetail with another major misstep by Wells Fargo. Last year, regulators slapped the bank with a $190 million fine after its retail banking staff opened some 2.1 million unauthorized clients accounts. That scandal led to the firing of 5,300 employees as well as the resignation of its CEO.

Last week, the bank announced plans to slash about 70 senior executives positions in its community bank division. A report in Bloomberg noted that the division, which includes the retail banking unit, has seen its profits tumble because of the fine.

Be On the Lookout for Your Clients

In light of this recent news, make sure any client holding an auto loan with Wells Fargo checks their monthly bill for duplicate insurance policies. If your client has been charged for coverage, cancel the Wells Fargo policy immediately and request a refund.

As the New York Times report points out, lender-placed auto insurance policies are uncommon in the auto loan industry. It’s not standard practice for other major banks such as Bank of America, Citibank, and JPMorgan Chase. Some smaller banks might mandate it, however, so it’s always advisable to review an auto loan to ensure that a client isn’t paying for two insurance policies. 

source: www.go.preciseleads.com

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Report: Self-Driving Cars to Bring in $81 Billion in Premiums

Report: Self-Driving Cars to Bring in $81 Billion in Premiums

by Precise Leads

May 22, 2017

 Auto insurers could see a boost in premium revenue from now until 2025 by insuring the tech systems in autonomous vehicles.

By 2035, 23 million autonomous vehicles will cruise down U.S. roads, predicts the Stevens Institute of Technology. Considering auto manufacturers like Ford and BMW as well as tech giants Apple and Google have already begun to test driverless cars, that number doesn’t seem so far-fetched. Lured by the potential to reduce human error caused accidents and propelled by innovative technologies, self-driving cars represent a new frontier in transportation.

For auto insurers, autonomous vehicles mean a complete overhaul in auto policy underwriting practices and risk assessment looms on the near horizon. Before long, auto insurers will base premiums not on the individual driver, but rather the high-tech systems steering the car and controlling traffic on the streets. This change comes at a time when insurers like State Farm have racked up massive underwriting losses in their auto insurance line as claim payouts skyrocket due to more accidents and the costly repairs crashes cause.

Yet a recently released report by Accenture and Stevens outlines how auto insurers could boost premium revenues by insuring self-driving cars — at least in the short term. To gain those increased premiums, however, auto insurers must rewrite policies to reflect the new rules of the road.

Premiums to Grow by $81 Billion by 2025

Whether driven by a human or not, cars still need insurance to protect against potential hazards. But as Accenture and Stevens researchers emphasize, policies underwritten for driverless cars need to account for risks and threats posed by cyber security lapses, manufacturer liability for possibly faulty software and hardware systems, and public infrastructure disruptions. Those emerging risks within the auto insurance segment led Accenture and Stevens to forecast an $81 billion hike in auto policy premiums by 2025.

Though theoretically freed from human mistakes, driverless vehicles are subject to those potentially damaging glitches. Hackers could pirate the car’s complex tech programs, breaching its data and security systems. The sensors and other devices guiding the car might malfunction as may the cloud-based external networks that manage traffic signals. Insurance policies for autonomous cars, therefore, must provide coverage for those likely events.

Of the $81 billion premium total, cyber security protection will account for $64 billion, the Accenture and Stevens report calculates. Product liability insurance will make up $14 billion, and public infrastructure coverage $3 billion.

“Autonomous-vehicle technology will drive a significant shift in risk from human error to malicious third party, software, hardware and infrastructure risk,” Chen Liu, co-author of the report and a research assistant at Stevens Institute of Technology’s School of Systems and Enterprises, said. “Understanding and proactively responding to this anticipated enterprise transformation is imperative.”

Less Reliance on Individual Policies

As driverless vehicles outnumber human-driven cars, insurers will write fewer individual policies, writes Werner Rapberger, Principal Director of Accenture’s Distribution and Marketing Practice for Insurance. The market for autonomous vehicles will shift to equipment manufacturers and other service providers, such as ridesharing companies, he adds.

As safer cars driven by technology, not accident-prone distracted humans, take to the road, insurers will see their claims payouts decline. But a dip in losses, Rapberger writes, may not be enough to offset an eventual erosion of total premiums due to the advent of driverless cars. “While insurers of autonomous vehicles will make fewer payouts for claims, this will not compensate them for lost policy revenues,” he says.

John Cusano, Senior Managing Director at Accenture and global head of the company’s Insurance practice, concurs premiums will spike from now until 2025 as auto insurers target a this new audience for auto insurance. After that date, premium growth with either plateau or decline. “Our research suggests that auto premiums will increase before they decline on this trend, so insurers that can navigate the changing technology environment could win market share,” Cusano said.

source:www.go.preciseleads.com

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Number of Insurance Companies Offering ACA Coverage in South Carolina Shrinks to One

Number of Insurance Companies Offering ACA Coverage in South Carolina Shrinks to One

by Precise Leads

May 24, 2017

Exchange providers in South Carolina have dwindled from five to one, with only Blue Cross Blue Shield remaining.

Next year, South Carolinians who seek to enroll in an Affordable Care Act (ACA) exchange plan will have only one choice. After a series of exits by major health insurance providers including Aetna, Blue Cross Blue Shield of South Carolina stands as the lone issuer of policies in the Palmetto State.

Previously, South Carolina’s ACA exchange platform offered plans from five health insurers. In addition to Aetna, Coventry and Consumer’s Choice have left the ACA marketplace, reports the Post and Courier in Charleston. Fortunately, Blue Cross Blue Shield of South Carolina, which currently provides coverage for 200,000, intends to stay on the exchange through next year, although a spokesperson for the insurer told the Post and Courier the company will closely monitor the healthcare debate now swirling in Washington.

“Like everyone else, we continue to pay close attention to what’s happening in Congress,” Patti Embry-Tautenhan said, "which promises to be fluid for the foreseeable future.”

Dwindling Choices in Several States

South Carolina’s situation mirrors what’s happening in other states where health insurers have exited ACA exchanges due to mounting losses, leaving residents with fewer options. Bloomberg reports all counties in Alaska, Wyoming, Oklahoma, and Alabama offer exchange-sponsored plans from only one insurer.

Likewise, many Iowa residents will be down to a single provider in 2018, and 16 counties in Tennessee may be left with no choices next year following Humana’s exit from that state. According to research from healthcare consultant Avalere and the AP, one insurer in 40% of U.S. counties will administer plans on the ACA exchange next year.

Those percentages could change as insurers receive more clarity from Congress on the healthcare reform bill that could radically alter the current ACA model. Specifically, insurers and state insurance agencies await the final fate of subsidies for low-income people to buy policies on the exchanges. Last month, President Trump suggested halting payments from the federal government in an effort to persuade congressional Democrats to negotiate on healthcare.

“The cost-sharing reduction piece has got to be the No. 1 issue for us in South Carolina,” Ray Farmer, Director of the South Carolina Department of Insurance, told the Post and Courier. “In my opinion, the market will implode if [Congress doesn't] fund the cost-sharing reductions and address it going forward.”

A shake-up of insurers on the ACA exchanges is imminent, as insurers are required to submit their applications to state insurance agencies by late June. South Carolina’s deadline is set for June 26, and Farmer relayed that his office has asked insurers to file two proposals based on whether or not the subsidies are available.

Despite the dwindling number of insurers in several states, the majority of people who receive health insurance from the ACA exchange still have a variety of choices. Bloomberg’s analysis of state marketplace and HealthCare.gov data showed more than one in three applicants can pick from at least four insurers.

Premium Hikes on the Horizon?

Rate filings have begun to trickle in in some states, and early data points to increased premiums. The Houston Herald reportsexchange insurers in Virginia and Maryland have requested rate hikes ranging from under 10% to more than 50%.

With healthcare still in flux, providing definitive answers to your clients is difficult. Continue to follow the ongoing deliberations in Washington. For clients who have purchased or plan to purchase an ACA exchange plan, know which insurers remain in play in your state and if those companies intend to raise premiums. Your clients depend on you to give them the vital information they need to make wise healthcare coverage decisions.

source:www.go.preciseleads.com

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The ABCs of Selling Group Health Insurance

The ABCs of Selling Group Health Insurance

by Precise Leads

March 29, 2017

 Because the market for group benefits has become more consolidated than ever before, agents will need to think creatively to succeed.

From commercial insurance to health insurance, coverage is a necessity for any business. For insurance agents, this means that selling to businesses is an opportunity that shouldn’t be missed — but following the implementation of the Affordable Care Act (ACA), the market for group health benefits has become limited. An ongoing series of mergers and acquisitions have reduced group health plan providers to a handful of companies, leaving businesses with fewer options to choose from (Blue Cross Blue Shield, Aetna, United Healthcare, and Cigna). At the same time, rising premiums and shrinking commissions have cornered many agents and pushed others out of the group benefits market.

It’s not all doom and gloom, however; to succeed in this potentially tricky market, agents simply need to think outside the box. Read on to learn more about strategies that balance limited coverage options with the excellent customer service your prospects have come to expect.

Embrace the Change 

Perhaps the most useful thing for you to keep in mind when developing sales strategies for group benefits is that successful agents work with market changes, not against them.

One major expectation shift in this market is that employers expect insurers to do more than simply quote policies. As Lockton Insurance Brokers’ Sallie Giblin explains on PropertyCasualty360, “Larger employers, especially, are expecting their broker to structure a wellness program for them.” Accordingly, many agencies have seen success after offering consulting and communications services for their clients — after all, isn’t it much easier to sell a health plan if the client (and all of their employees) actually understand how the plan works?

To that end, you should be willing and able to leverage technology in service of your clients. For instance, Marshall & Sterling uses a technology called iNavigator to help onboard and offboard employees. With the help of predictive modeling algorithms, the agency is capable of custom-designing employer benefits plans that account for high-risk employees, among other factors. Other brokers have also seen good results from providing “shopping carts,” or tools for client HR departments which help employees decide between the options available to them.

Cultivate Relationships

As an insurance agent, you understand the human variable of the sales process. You’re not just selling a product and walking away — you’re the main point of contact for the implementation of the plan you sell, not to mention future questions about costs or logistics.

It shouldn’t surprise you, then, that the bulk of your work in the group health benefits space will consist of maintaining any existing client relationships you have and cultivating new ones. For that reason, one of the most direct strategies to boost your sales numbers is simply to rely on the relationships you already have. In the words of VP of Strategy at VUE Software John Sarich, “if you have a client who is spending $100,000 a year with you in premiums, it isn’t a great leap to sit down with them and talk about employee benefits.”

If you have a client who has already purchased some type of high-dollar premium insurance, reach out to them and discuss the possibility of a health plan. While you obviously shouldn’t push products to clients who aren’t interested in them, it’s easy to see why focusing your energies on existing relationships can be an effective strategy: “When you bring in the employee benefits and P&C sides together, you now have an opportunity to become a one-stop financial store,” Sarich explains.

Lead Generation is Essential

Although existing clients will be the backbone of your business, you can’t grow your business without new clients. Cold calling may bring in one or two qualified leads, but it’s a tactic which saps your morale and can potentially ruin relationships with prospects.

Instead of spending your days calling businesses who may have zero interest in your policies, then, you should partner with an internet lead provider. These services source contact information from prospects who have already expressed interest in buying insurance, and the best lead providers will segment leads by product line for maximum effectiveness. Wouldn’t it be easier to establish a relationship with a prospect if you knew they were already interested in what you’re selling?

At the end of the day, the condensed market can make selling group health plans a challenge, but if you examine the options available to you and adopt a savvy approach to selling group benefits, you’ll be able to grow your business in no time.

source:www.go.preciseleads.com

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MetLife Survey Findings Show Why Agents Should Be Cross-Selling Benefits

MetLife Survey Findings Show Why Agents Should Be Cross-Selling Benefits

by Precise Leads

April 14, 2017

Employers want more advice on employee benefit packages so they can retain key employees. Brokers are ready to give it to them.

Fearful of losing employees to the burgeoning freelance gig marketplace, employers increasingly view benefits as a vehicle to attract and retain workers. MetLife’s 15th annual U.S. Employee Benefit Trends Studyreleased earlier this month revealed 83% of employers rank retaining employees through a benefits package above using benefits to boost employee productivity (80%) and control health costs (79%). What’s more, 51% of employers expect benefits to emerge as a significant retention tool within the next three to five years.

Todd Katz, EVP of Group Benefits at MetLife, told Bloomberg BNA the traditional employee-employer relationship has been upended by workers to seeking flexible, freelance work assignments. To retain key staffers, employers must therefore provide a more enticing and all-encompassing benefits menu, Katz said.

What Employers Want for Employees

After interviewing more than 2,500 benefits administrators at companies with at least two employees in the fall, MetLife’s researchers concluded their interest in hearing about all types of benefits jumped by a wide margin between 2015 and 2016.

Benefit executives expressed a rising interest in 16 benefits options, ranging from providing global benefit solutions and recommending non-medical benefits to advising on the Affordable Care Act. In fact, for each item, the desire for more information rose between seven and 11 points from 2015 to last year.

Particularly noteworthy was the focus on non-medical benefits such as dental and disability insurance which climbed from 48% to 58%. Global benefits solutions charted the highest percentage point increase — from 41% to 52%.

Perhaps reflective of the impact the ACA has had on the employee benefits marketplace, a higher percentage of benefit administrators said they wanted more consultation on that health care law — 64% from 57%. That shouldn’t be surprising, LifeHealthPro noted in a summary of the MetLife survey, considering the complexity of ACA in terms of benefit mandates, reporting requirements, and penalties. Any help companies get from their brokers on the law is welcome.

Help Wanted from Brokers

The MetLife survey underscores the vital role brokers play in advising companies on their employee benefits packages. 81% of companies turned to brokers rather than consultants or consulting firms (75%) when seeking more information on benefits when renewal time came due, the study found.

This means group benefits brokers currently working with companies have a receptive audience for their services and policies. Brokers have a unique opportunity to turn this enthusiasm into a selling opportunity. The more packages you offer benefit administrators, the more their interest will be piqued, especially when it comes to health care and wellness programs.

Of course, even if you have a stable book of group benefits business, you should always be aiming to generate new prospects via internet lead providers and referrals. Brokers and firms should also explore cross-selling opportunities. If you’ve sold a company P&C coverage, for instance, inquire if they need an employee health and wellness package. Benefits administrators crave more advice on those subjects and will probably be warmer to someone they’ve already worked with.

Cross-selling and bundling policies do carry some caveats. 

Recent research from the University of Chicago detailed the tricky path brokers navigate when selling bundled packages. While consumers prefer the convenience (and discounts) of working with one company as a “one-stop shop,” they also are reluctant to take on additional products for extra dollars. Moreover, if one product in the bundle fails to deliver, consumers show an inclination to sour on the entire package. That same consumer mindset holds true for insurance services, the researchers concluded.

Although clients and prospects may be receptive to hearing about your services, tread carefully when discussing a new policy with them. To counter any reluctance to taking on additional premiums, emphasize the value the policies bring to them, i.e., boosting employee retention with a richer cluster of benefits. And always provide good service once a policy is signed.

source: www.go.preciseleads.com

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