Why the Affordable Care Act Didn’t Put Insurance Agents Out of Business
When the Affordable Care Act took effect, there were a host of predictions that the new law would leave no room for health insurance agents to offer their services. A column in Forbes even predicted the “mass firing” of agents.
Fast forward a few years, and we find that the business of health insurance agents is still in full swing. Entering the third year of ACA open enrollment, we’re happy to report that rumors of agents’ demise were not only greatly exaggerated, but pretty much completely unfounded.
The Kaiser Family Foundation recently found that the ACA has pushed opportunities for agents to expand business. In fact, nearly 4 in 10 agents agree that the changes in health care presented an increase in business.
So why is the agency business alive and well? Part of the answer has to do with the specific services agents provide, and part of it stems from the change and confusion brought on by a comprehensive new law known as the ACA.
Providing a Service
Health insurance agents talk with customers, potential and current, about insurance and what it means for that customer specifically. After hearing what the customer needs, an agent finds the plan that is right for them.
Kennon Wainwright, vice president of sales and agency manager for NC Health Plans/Jerry Ballard & Associates, describes the agency business as being focused on finding coverage for specific situations for individuals, families and businesses. “We are here to give advice, support, and guidance during a time that isn’t so straightforward,” he says.
With the launch of the ACA marketplace, many experts predicted that almost all policies would be purchased through healthcare.gov. The site allows shoppers to view different plans and compare each one side by side in a consumer-friendly fashion.
Likewise, small businesses could do the same. Instead of taking hours out of the day to meet with agents, a group could view several plans at once and choose the best one for their employees. Of course, many agents feared the worst.
What Really Happened
It turns out that the ACA is complex and confusing to many consumers and small businesses. Insurance is now a mandate, and many people having to buy insurance were doing it for the first time. Understanding terms like copayment, deductible and provider network can take time for customers new to insurance.
Into the information void stepped insurance agents with their experience, knowledge and deep roots in their communities. Agents often became the ones to turn to: They are professionals, able to explain the terms, and answer the questions that would ultimately match consumers, and companies, with the right plan.
Now that two years of ACA open enrollment are behind us, it’s clear that the health insurance agency business is healthier than predicted. For example, the Aflac Workforces Report shows that nearly 58% of agents plan for an increase in revenue over the next 12 months compared to previous years.
Simply put, the agent business is not being hurt by the ACA, and the prospects for agents look good. The ACA might be changing a lot of things, but the traditional role of agents helping consumers and small businesses with health benefits remains intact.
[Top image: Shutterstock]