3 ways brokers can take advantage of the changing insurance market 

The commercial health insurance market is undergoing a serious transformation. Market disruptors are entering the space and traditional insurance providers are consolidating. 

Humana recently made waves by announcing that it would be leaving the employer insurance market, leaving nearly 1million people in search of new health insurance plans. At the same time, non-traditional players like CVS, Amazon and Walmart are arriving on the scene. Soon, clients will be looking to their benefits advisors to see how this impacts them, with some becoming more eager to try something new. Brokers need to stay abreast of these industry developments, evaluate new options and offer innovative solutions that may be beneficial for their clients. 

The health care industry is evolving – why brokers must pay attention

CVS acquired Aetna; Walmart announced a partnership with UnitedHealthcare; Amazon acquired One Medical. The health care industry has evolved significantly over the last few years, and the full impact of these new entrants is still unknown. However, staying informed and sharing developments with your clients will prove to be invaluable.

The insurance market is much more complex and therefore requires more thought, introspection, and strategy when it comes to selecting the optimal plan. As the landscape changes, here are three things that brokers need to do now.

1. Brokers with Humana clients must explore new options now

In its initial announcement, Humana said it would leave the employer-sponsored health insurance business in the next 18-24 months. Proactive brokers are already evaluating new options for their clients to consider. 

Brokers can use this time to infuse new life into the relationship, especially if a client has been on the same, underperforming plan for the past few years. Revisit clients’ needs and preferences. This information can change each year, yet clients often neglect to inform their brokers. 

This proactive step, along with regular communication about a plan moving forward post-Humana, can reinvigorate a client relationship and help brokers identify new and innovative ways to help clients reduce costs and improve employee benefits.  

2. Continue to follow all industry news to gain a competitive edge

The non-traditional players entering the market are leveraging their existing strengths in technology and retail to emerge as new forces in the health insurance industry. We’re now seeing new partnerships between insurers, providers, and retailers, changing the way health care is delivered and financed.

With such big companies entering the market, clients will take notice and begin to wonder if they should be exploring these new options. Brokers must stay on top of the latest news and be able to anticipate the impacts and potential benefits for clients. It’s also important to consider nuances by region or client size. For example, it’s possible these new entrants will benefit smaller employers who lack the bargaining power to negotiate with traditional carriers.

“These new entrants are shaking up the market and forcing brokers to think outside the box,” says Brian Howard, founder and CEO of Amity Benefits. “As brokers, it’s our duty to explore all options and provide our clients with the best solution for their needs. To do that successfully, we need to be experts on all available solutions, including the new, innovative options.”

3. Be open to new, non-traditional solutions and advise your clients accordingly.

With Humana’s exit and the rise of new options from non-traditional players, brokers could be failing their clients if they are only sticking with what they know.

There’s no one-size-fits-all approach to health insurance and every company is unique. That’s why brokers who build strong relationships with their clients can better customize solutions and anticipate the next best step to take. Employers are ready for change; the status quo is not serving them. The more you understand a client’s pain points, the more confident you will be in presenting new solutions. Brokers need to consider all of today’s options to find solutions for clients that are both customizable and cost-effective.

Employers self-funding with a major carrier may have better control over their finances and access to the established provider network. However, these traditional self-funded solutions often don’t fully maximize savings, since employers are still paying high network fees. Instead, there are established options that can help employers reduce costs for themselves and their employees. For example, a reference-based pricing solution can take the financial burden off employers by eliminating hidden fees and allowing employees to pay for the trust cost of health care services. These cost savings let the employer reinvest in other areas of the business.

“As prices continue to rise, clients will begin to jump ship if their brokers can’t find more affordable solutions,” says Howard. “Self-funded insurance solutions offering innovative approaches like reference-based pricing, direct contracts, and new pharmacy solutions are not only the future, but solutions that brokers can tap into right now.” 

It’s easy to get complacent and opt for one of the major insurance carriers. They feel like safe choices, but they’re not always the best choice. 

Bottom line

Humana’s announcement was just another domino falling in the ever-evolving health insurance industry. Changes to the insurance market bring big opportunities. Clients will appreciate new options, and some brokers may even find that their clients are more than ready for change. Brokers who are willing to explore innovative solutions and embrace these industry changes will succeed, and those that don’t may get left behind.

The opportunity is there for the taking. It’s up to brokers to seize it.

Jeff Bak is an expert in reference-based pricing and the CEO of Imagine360, a company offering simplified, total health plan solutions for self-funded businesses.