Healthcare 2017 Viewed Through Brokers’ Lens

by Clive Riddle, July 7, 2017

With the onset of the ACA at the start of this decade, if one asked how brokers would view the world of healthcare seven years later, some would have answered “who cares – they will become irrelevant.” But flash forward to 2017 and here they are, continuing to play the role they have always played, even though the landscape has certainly shifted. Despite disintermediation, public exchanges, technology and a host of other challenges, brokers remain at bat, swinging away.

BenefitsPRO has just released they annual broker survey, with responses from 350 brokers representing the spectrum of industry sectors. One might have thought brokers of all people, would firmly be in the camp of ACA repeal, 50% “would like to see the ACA retained and repaired, while 28 percent prefer a gradual repeal and replace, and 22 percent want it repealed and replaced immediately.”

One insight is that brokers business has evolved so that the public exchange market isn’t a material part of their business. When asked, “how have state exchanges’ struggles impacted your business,” 48% said there was no effect, 35% replied it hurt a little or significantly, and 17% said it helped a little or significantly.” The individual market has gravitated away from brokers, with 34% not involved, 37% reporting minimal demand, and less than ten percent stating “enrolling individuals on the public exchange is worth the effort.” Private exchanges aren’t a dominant force at this point, as “nearly 6 in 10 of those responding say they do not have a private exchange partner for enrollment and benefits administration.”

While technology has facilitated some disintermediation, brokers continue to attempt to enhance their value offering a personal touch that online tools can’t offer. The survey report noted that 53 “percent of respondents say meeting in a group setting at the worksite is the primary enrollment technique, while 36 percent cited one-on-one meetings in the workplace. However, 39 percent say their top method is using an electronic enrollment tool independently.”

But losses of individual and other health insurance market share have been offset by growth in the voluntary benefit sector, with 57% identifying with the statement that “they will use voluntary benefits to offset anticipated commission losses from health insurance this year.”

Looking toward the future, consolidation looms large, just as in all other healthcare sectors, as “27% expect their organization to acquire or merge with another broker/agent organization,” while 14% “ look for another broker/agent to acquire their organization” and “14% also say their company will leave the health insurance brokerage business.”

Brokers focus for the future includes 84% “promoting ancillary insurance coverage,” 58% “promoting health plan consumer engagement and health and wellness programs,” 43% “promoting third-party consumer engagement and health and wellness programs, while 53% will be concerned about the threat of “the new wave of disruptive companies entering the industry.” A particular innovation they are concerned with is payroll companies with direct benefits distribution, with 57% viewing this a concerning.