A Fond Farewell to 2015

Michael Lujan LLH Blog


By Michael Lujan – Limelight Health Chief Strategy Officer & CAHU President

I’d like to remember 2015 as a year of learning and growth. In 2015, I went back to school (briefly) and learned more about building a tech startup. As CAHU President, I continue to learn what it means to serve an association in the midst of epic industry change and transformation. We also learned new products, tools and strategies. In 2015, health care continued to make regular news, fueled by rising drug prices, mergers, politics, narrower networks, price transparency and the constant wave of new reforms ushered in by the ACA. It was a big year for our industry.

A few takeaways from 2015:

Health Tech is a real thing. Massive investments were made in digital health in 2015. We saw more wearable medical devices, cloud-based computing and transparency initiatives to enable consumers to make more informed health care choices. Consumers now have more tools and choices for purchasing coverage; through their employers or through state or federal marketplaces. CAHU’s firstTech Expo provided just a small glimpse into the burgeoning health tech space. By 2018 we may not have real hover boards, but embedded and integrated health tech will be the new normal – and we’ll all be better for it.

Fewer Agents? In 2015, McKinsey & Co., reported the average age of a US insurance agent in 59 and expects one-fourth of the industry’s work force is expected to retire by 2018. To balance-out the numbers means hiring three younger producers for every producer currently employed. While that may be true, there is also a steady stream of new agents joining the industry everyday. I believe tech-enabled brokers can serve more clients, more efficiently. CAHU welcomes these new agents. Connect with our Vanguard Council and look for more training and certification resources created for the next wave of young agents. To paraphrase a famous Mark Twain quote,

“The rumors of our demise were greatly exaggerated.”

Legislation – CAHU’s AB 1163 was signed by Gov Brown in Oct – The first law in the US requiring fair notice to agents of material changes to their contracts. Here’s a list of other health-related laws taking effect in 2016. Also, on December 18th, President Obama signed into law a two-year delay of the Cadillac Tax. The earliest that the Cadillac Tax will go into effect is January 1, 2020, although opponents are expected to work on repealing the tax before then. Our VoterVoiceactivity was impressive this year, and shows we are getting more agents involved in the legislative process.

CAHU also seized new opportunities to promote the role of the agent in more venues and places we are not normally invited to. Being present at these events is important as major decisions and health laws are often born from these meetings so it’s important to have agents at the table. This year, CAHU was invited (or invited ourselves) to speak at several events dealing with the ACA, the uninsured, MediCal and Covered California. In February or March, we’ll read more reports and articles showing agents provided the greatest share of enrollment, both on and off-exchange. This data, and our growing voice will demand greater influence and appreciation for agents and CAHU in 2016. Look for more CAHU-lead legislation and advocacy to help secure and promote the role of agents in early 2016.

Most employers still offer group coverage. The mass exodus to the exchange or “employer dumping” simply didn’t happen, as some predicted.Employers kept their coverage, and relied on traditional benefits brokers with years of experience and new technology tools to help integrate benefits with HR and payroll, when that made sense. While the new technology is truly valuable, it’s most valuable in the hands of expert brokers with experience. Hoist your milkshakes… Cheers!

Bending the cost curve is a longer journey. Lowering health insurance premiums can only happen if we lower the costs of health care. “Population health” means keeping people healthy and out of the hospital and it gained traction in 2015. Accountable care organizations and bundled-care plans help link patients to the full spectrum of services, from preventive care to highly specialized hospital care and other methods of eliminating waste in our health care spend. I will share more thoughts and details in my next post.

Merger-Mania continues. Hospitals, insurance companies and large broker firms consolidated through mergers or acquisition in record numbers this year. Cigna and Anthem, Aetna and Humana mergers will move forward, it seems. On the surface it seems like fewer carrier options for consumers but also has the potential of achieving more competitive rates due to their larger scale and efficiencies. Only time will tell what this really means for agents but it’s likely more mergers will happen in 2016 as everyone in the health care space is seeking new ways to find their place and maximize their margins in this new post-ACA marketplace.

The Presidential debates… In case you’ve been too busy to notice, we’ll have a Presidential election in 2016. Someone will inherit the challenges of keeping or repealing the ACA. Recent surveys found that 85% of respondents said Obamacare will factor into their vote for the next president, although polls are also evenly split when asked if they prefer to repeal or keep the law. If repealed, the CBO estimates 14 million Americans would lose Medicaid coverage, 18 million would lose non-group coverage and about 24 million more non-elderly U.S. residents would be uninsured. The CBO also estimated the cost of repealing would add $137 billion to our federal budget deficit over the next decade so it seems more likely we’ll see more tweaks and fix-it legislation – no matter who wins. “It’s gonna be huge.”

For the professional health insurance agent, it was tougher year due to compressed renewal cycles and the impossible volumes of work created by this market disruption and seasonality.  For some other agents, it was a winning year for successfully deploying strategies planned years ago aimed at creating opportunity out of chaos. Simply put, this year put agents on a scary rollercoaster ride than tested our patience, finances, tempers and faith in an industry that we have proudly served for many years. Still, agents remained resilient and adapted to the changes in the same way we handle a serious storm. You shore up what you can, brace yourself and assess your damages (if any). Some of us chose to surf these monster waves and hired more staff, created new solutions and technology startups, effectively betting heavy that agents are the answer.

If this year has shown us anything, it is that California continues to lead the country in innovation, technology and policy. I’m proud to serve as CAHU President and approach January 2016 with a renewed urgency to finish what we started in July 2015. CAHU owes our members our very best work and efforts. We are blessed to have Julianne Broyles and Mike Belote represent us in Sacramento. Susan Peters does an amazing job as our Executive Director and is much appreciated. I’ll close my message by thanking every one of our CAHU board members, local chapter leaders, committee members, and of course, our members for supporting CAHU and the work we have been entrusted to do on your behalf.

Wishing you all a very happy, healthy and prosperous new year!

 Michael Lujan, RHU, CHRS