Healthcare Reform – The End of Brokers?

Hell No!

This is America, the land of opportunity and entrepreneurs. It will be up to you to meet the new challenges from HCR or go the way of  the blacksmith, the buggy whip, the typewriter, black and white TV, 8 tracks and cassettes, LP’s, VCR’s and other tools that change has left behind.

I believe that healthcare reform – whether you like it or not – will be a huge boon for brokers who add true value to their customers. The students of the business and innovators who really know and understand customer needs will flourish and grow as they adapt their practices to the marketplace realities and opportunities they create.

Recent History of the Benefits Industry Evolution

In my 35 years in the industry I have witnessed a sea  change in our industry, all of which have created opportunity for quality intermediairies who developed the skills and skill sets internally to deal with the new complexities and opportunities they have created.

Lets look at the major ones:

  1. Late ’70’s/early ’80’s – decoupling of benefits from one large carrier providing them all to best of breed being chosen and put together as a “program”
  2. Mid ’80’s/Early ’90’s – Flexible benefits arrive requiring new creativity and communication skills and choices for employees
  3. Late ’80’s/mid ’90’s – The rise of managed (or mismanaged) care. HMO. POS, PPO, in and out of network et al replace major medical, wraparounds, 100% plans et al
  4. Mid 90″s on – The rise of 401K and the decline of DB and DC plans
  5. Late ’90’s on – Rise of self funding for smaller and smaller groups.
  6. 1997 on – Technology hits the industry and continues to grow in use from enrollment, admin, communication et al.
  7. Mid 90’s 0n as HIPAA comes into being and states legislate more due to managed care compliance becomes a must part of any practice.
  8. Late 90’s on – Worksite/Voluntary benefits become part of the product portfolio.
  9. 2000 on- Benefits Communication comes into its own as the web grows and becomes ubiquitous
  10. 2002 0n – As HR staffs get downsized HR and outsourcing  practices grow as new programs are introduced to help clients deal with all this complexity
  11. 2003 on- Carving out RX benefits as a separate program to get the best pricing takes hold
  12. 2007 0n – Wellness becomes a necessity for cost containment reasons
  13. 2009 on – Technology is now a core part of day to day business and servicing customers day to day. Rise of Social Media opens new doors
  14. 2010 – Healthcare Reform becomes the law. What does it mean?
  15. 2010-2014 – Reform specifics will get clarified and plan options explode from exchanges, associations, carrier innovation etc.

Many readers who are younger probably don’t even realize that the skills and work they do today didn’t exist even 20 years ago but today is an expected part of the services any quality firm delivers.

Whether you agree with the reform bill or not is not relevant now. We all agree change is needed and that change is now official at least in direction. Much will change and evolve as well before 2014 but now we all know that change is occurring.

Consolidation will continue unabated but that does not mean that reform will drive the industry into a world of just a dozen or so large entities.

The specifics and evolution of new businesses and opportunities driven by this and technology will be fast and furious making it imperative that your organization is nimble, keeps up to date and has a team that learns and adapts quickly.

Expertise and creativity driven by knowledgeable professionals using the latest technologies will be the coin of this new realm and there will continue to be great opportunities for the right people and organizations.

I hope you are all up to the challenge because it is going to be an “E” ticket ride, whether you like it or not!

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4 Comments on “Healthcare Reform – The End of Brokers?”

  1. jeremy Says:

    I just wrote a long article about this, and as a major online health insurance brokerage, (East Coast Health Insurance is my company) I can use Massachusetts as a parallel and thus have to disagree with you on this. Ehealth right now is virtually begging to become the exchange as is Norvax and I would too but most states can easily do this themselves just like Mass. did. If you don’t know what I am talking about, try to find an online health insurance broker in Mass, besides the government exchange. My other points can be found here, http://echealthinsurance.com/blog/health-reform-and-brokers/.
    Otherwise, I did like the article and hope you are right and I am wrong!

    • John Nail Says:

      Jeremy, thanks for your comments. It is great to have real life input on HCR as MA is our one and only petri dish to look at.

      I have seen your site before and wondered about it.

      I’d love to see some more detail abut this from your perspective.

  2. jeremy Says:

    Actually besides Massachusetts, Maine is even worse! Read this from the NY Times, http://www.nytimes.com/2009/11/11/he…y/11maine.html

    Other then the speculation that has run rampant of late, the only thing that is clear is that no one person has any idea of what this will do. Its kind of like hitting the go button on a time travel machine that has no settings. The danger to the economy that this reform is causing is unprecedented. Many of the minor details that have not really been considered in the 2400 page legislation are not fully understood by anyone!
    After you read that NY Times article you will have a better understanding of what I expect to happen based on the disaster in Maine.

  3. jerry cohen Says:

    wanted to say that the state of ny has mandated most of the principles of health reform since 1995 under our community rating laws. Rates have risen dramatically, we are reduced to a handful of carriers, and our state health department says we have 2.5 million uninsured. i sugggest you review our Healthy NY programs and our state mandated individual plans to gain some perspective.


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