Are Fully Insured Products Becoming the High Risk Pool?
For years, the Markets in NJ, PA, FL and others have been changing. As the ACA, aka Obamacare set in, carriers issued big increases to keep up with demand for healthcare and the rising costs associated with it. As more and more people became covered and sought healthcare on a regular basis, costs went up with it. Just the opposite of what they said would happen. They thought more people in the system would lead to more cheaper healthcare but the people that came in, were the people who were using it.
So, what happens when costs go up and insurance carriers are fighting to be competitive and gain market share, they innovate. They create products like Level Funding, a self-funded hyrbid that works like fully insured. These can provide cheaper options because the carriers can underwrite the way they used. Carriers could look at the health of a group and decide which groups had the best risks and which ones they don't take a chance on.
Today, in our markets, carriers have answered the call and all the big players are now selling Level Funded type products and its exciting for us brokers too! At least the ones that understand and sell them. In the past, companies could receive 15-30% increases with no answer. Today, we can provide more and more options and often at rates way below fully insured renewals. Not always, but often!
So, where does that leave the Marketplace? Fortunately, or unfortunately, the marketplace will probably become the place where companies go when they can't find other options because they are guaranteed coverage there. Are we there now? No! So take a look at everything! Make sure you're seeing all the options... fully-insured and level funding. And...
If you're "shopping" for coverage the old fashion way and wondering why you're getting the same results, maybe its time to try something different. Maybe its time for United Benefits Partners! The leader in Employee Benefits Marketing! www.ubpbenefits.com