Why Out-of-Pocket Supplement Plans Can Help You Help Overwhelmed Clients—and Yourself
Not only are consumers reeling over the prices of ACA-compliant insurance, agents are
being starved out of the marketplace. Greg Hellmich of SASid explains how helping
your clients manage soaring out-of-pocket costs can be a game changer.
Janesville, WI (January 2014)—We’ve seen plenty of news stories about the “winners and losers” of Obamacare. And while the media has focused on consumers upset about having to pay more (often far more) in premiums and deductibles, it has virtually ignored another “losing” group: insurance agents. It used to be that agents were trusted advisors who were decently paid for helping consumers find the perfect healthcare plan. Then the ACA happened.
“Agents are losing their identities under Obamacare,” says Greg Hellmich, vice president of agent distribution at Smart and Simple insurance development (SASid). “The government has basically tried to commoditize healthcare, and the experiment is proving to be a miserable failure, not just for consumers but also for agents. In fact, compensation has been cut to the point that many are leaving the industry.”
He says the solution his company has come up with is a win-win for both parties: Simply offer consumers a high-deductible ACA-compliant plan paired with a supplemental plan that helps consumers manage their increased out-of-pocket exposure.
SASid is preparing to unveil its deductible supplement plans. These plans pay fixed indemnity benefits toward sickness and accidents.
“Consumers no longer need to be hesitant to select high-deductible plans,” notes Hellmich. “When purchased along with one of SASid’s supplement plans, what may have seemed like an unacceptable risk now seems more reasonable.”
Here are four reasons to offer deductible supplement plans to your customers:
REASON 1:For many policyholders, having two plans is less expensive than having one
Starting in 2014, Americans will be required to have a qualified health plan or pay a penalty. QHPs can have large deductibles, co-pays, and out-of-pocket expenses—up to $6,350 per person or $12,700 per family. Hellmich says SASid’s supplement plans can provide significant relief from these costs. Very few customers feel comfortable with such high deductibles.
Let’s say a client purchases a QHP $6,000 silver PPO plan for $209.45 a month and pairs it with a QHP supplement 5000 plan for $138.04 a month. Her total is $347.49 a month for both plans. Had she purchased a platinum QHP plan instead, her premiums would have been $98.04 more per month or $1,176.48 more a year.
“Purchasing these two plans together saves your client almost $100 a month and provides first-dollar benefits for hospital/ICU stays, ER visits, office visits, and so forth,” says Hellmich. “Since few people are accustomed to or comfortable with such high out-of-pocket costs, you’re also providing psychological relief, which is just as valuable a service as the financial savings.”
REASON 2: It makes selling Obamacare plans profitable for the agent
Hellmich explains that for most insurance agents, compensation has fallen rapidly over the past few years. Now that Obamacare has officially rolled out, the situation is even worse—the commissions on ACA-compliant plans are extremely low. By pairing supplements with high-deductible plans, agents can make considerably more money.
“Our supplements pay two to three times the commission of ACA-compliant plans,” notes Hellmich. “This is very, very good news for agents as it means they may actually be able to make more money than before. In fact, the supplement strategy can make the profession seem attractive again to those who felt they had no choice but to leave it.”
REASON 3: It increases customer loyalty
Deductible supplement plans are not available on public exchanges. This fact is good news for agents as it gives consumers a reason to choose them—and stick with them—rather than going the website route.
“When you sell insurance in a bundle this way, you tend to shore up your client relationships,” says Hellmich. “Clients are less likely to leave you, because it would be difficult for another agent to replicate the combination.
“Plus, customers are generally grateful to any agent who can help them navigate the complexities of Obamacare,” he adds. “They really don’t understand it and will quickly come to depend on anyone who can help them make sense of it.”
REASON 4: It increases agent satisfaction
Being able to sell ACA-compliant plan/supplement combos makes agents “experts” again, notes Hellmich. It allows them to feel they are doing meaningful work at a fair price.
“Insurance is both a science and an art and should never have been commoditized,” he says. “People’s lives are not one-size-fits-all, and insurance shouldn’t be either. These supplements allow agents to say, ‘Okay, let’s talk about your specific needs and find a solution tailored to you.’ This helps agents bring back some of the ‘art’ aspect of selling insurance. And it feels good to help craft a solution that works for the individual.”
Hellmich says it’s ironic that just when consumers are most confused and in need of guidance that those who have traditionally provided that help are being starved out of the marketplace.
“As an industry, we need to find ways to help agents return to their rightful role as trusted advisors,” he says. “People need help in making sense of a massive change that’s disrupting many different aspects of our lives as individuals and as a nation. These supplement plans are a good start, but I look forward to seeing what other innovations we can come up with.”
About Greg Hellmich:
Greg Hellmich, vice president of agent distribution at SASid, is a 25-year seasoned veteran in the life, health, and ancillary insurance industry. He develops agents, agencies, and call centers aimed at selling SASid’s online exclusive insurance products and platforms. Hellmich’s main focus is helping agent-producers maximize their earning power with SASid’s exclusive insurance products, lead generating systems, and marketing tools. Contact Greg Hellmich directly at 608-314-2116 or [email protected].
SASid is the acronym for Smart and Simple insurance development. We build, administer, and market insurance products that are smart for people to have and simple for them to understand, quote, and purchase. SASid has been developing insurance products and web applications for the insurance agent since 1995. SASid has been included in the Inc. 5000 the last three years for significant growth. For more information regarding the deductible supplement plans, check out www.sasid.com/deductible-supplement-insurance.