The changes in workplace-provided health care benefits triggered by the Affordable Care Act have been myriad and well-publicized, as have the headaches endured by the employers who have dealt with rising costs and changing plans.
Imagine, for a second, what it’s been like in the industry itself.
For many brokers, providers and consultants in the South Sound, those frustrations have multiplied exponentially.
“Everything’s different,” said Chris Free, principal at Rapport Benefits Group and an agent advisory committee appointee for the Washington State Office of the Insurance Commissioner. “There’s been just so much upheaval and change that, in a lot of ways, it’s made it harder for us to do business. Not necessarily in a sense that the whole industry has changed, but our status quo has been disrupted so much that we’re just, lately, constantly on the alert for the next thing — even now, in January 2014, when we’re past a lot of our first wave of deadlines.”
The biggest of deadlines passed over the New Year’s holiday, as Dec. 31 was the last day for enrolling in group plans, including those provided by employers, to be finalized. For area brokers, that amounted to a mad scramble, as firms worked around the clock to get data entered and processed for their clients to have coverage ready by the time people came back to work in 2014.
“I spent a lot of December here [in the office],” laughed David G. Maddock of brokerage Maddock and Associates in Fife. “There were days I’d be here until 10 [p.m.], and the next day, I’d be here at 5 in the morning. Normally, I like to get up early anyway and work out, but man, I didn’t even think about it then.
“Usually, any given year, maybe 30 percent of people switch plans,” Maddock explained. “This [year] seemed like almost everybody.”
“My staff was working a lot of hours,” said Gayle Holcom of Tacoma’s Pilkey-Hopping & Ekberg. “They were getting here early. They were spending a lot of time on the phone with the Health Exchange, seeing if we can get status updates on things. It started Oct. 1, because that was the first day the exchange was opened. Those first few weeks were really chaotic. Everybody worked really, really hard, and honestly, we were really glad when we got to Dec. 31.”
As if the volume of work wasn’t enough, the rollout of the new law’s effects has been notoriously plagued with pushed-back deadlines, glitchy websites, unplanned changes and legislative vagaries.
The result, many industry professionals in the region agree, has been the other big headache in the months leading to Jan. 1: uncertainty.
“They keep changing things,” said Maddock. “Literally, one day, I did a big video presentation on the employer mandate, and an hour later, they pushed it back a year. That’s happened multiple times on these different rules.
“In the past, a change would happen and we’d be ready. There would be all these seminars on it, and it would be almost boring, plus the change would be really minor. Now, it’s massive changes, and quickly.”
Holcom can sympathize.
“We were doing a program on health care reform back in November,” said Holcom. “The professional society I belong to [the Society of Financial Service Professionals] was doing a national broadcast. On Friday, we had our final rehearsal with our slides and everything, and they said if we wanted to make any changes to the slides, they had to be in done by Monday at noon.
“We thought just at the last minute that maybe we should put a disclaimer on this, like, ‘These slides are correct as of Monday.’ I’m glad we did, because by the time Wednesday morning at 9 o’clock had rolled around, there were already two changes in the law by noon on Monday and Wednesday morning.”
It’s something to laugh about now, but there have been real impacts on offices, said Free.
“In the middle of November, President Obama came out at like 8:30 or 9 in the morning and said, ‘We’re sorry, we messed this up, everybody can keep your plan.’
“Well, by about noon the same day, [Washington Insurance] Commissioner [Mike] Kreidler comes on and says, ‘No, not in Washington state.’ Just think about the frustration as a citizen. Well, you don’t want to know how many phone calls my office had to field from folks thinking they could keep their plan but couldn’t. How many phone calls do you think each of the individual insurance companies had to field? That’s administrative work. That’s administrative cost to our system that provided no value to anybody.”
“A concern is that the things that we’re trying to prepare our clients — and particularly our employers — for over the last three of four years, now it’s like, ‘Oh, well, now that’s not really true anymore,’” Holcom added.
And looking to the government for answers has, at times, led to further frustration.
“The frustration for a lot of us has been just not having the answers that we’re trying to get for our clients,” said Holcom. “Certain departments in the state are totally overwhelmed with calls trying to get answers resolved. One of my staff members was on the phone with the [state] insurance office a few months ago, and she was actually on hold for four hours.
“She got a lot of work done,” Holcom quipped, “because nobody bothered her while she was on the phone.
“For many weeks, I had somebody who was here right at 8 o’clock [a.m.] to call the exchange and try to get in, because if you waited until 8:05, they would drop your call or you’d be on hold for hours. There were just so many people trying to get into the system to get information.”
“Not that they could have hired 100,000 people to work the phones at the exchange,” Holcom added. “That’s not practical. But by this time, we should be able to have ways to get information. In an age with the data we can transmit with our technology, let’s see if we can make this work a little better.”
Not out of the woods yet
The new year, too, has brought its own set of issues.
“We’re still trying not to let our clients down, doing everything we can to make it all work,” said Maddock. “The frustrating thing that’s come out this new year is that, regardless of what we did, the insurance companies were not able to keep up. There are a lot of people right now without an ID card and needing a prescription.
“Once we submit all the paperwork through to the insurance company, once they process it, there’s nothing we can do about it, except for keeping people informed. That’s just a really frustrating place to be in. We’re the ones who helped them get signed up, but until the insurance companies do their thing, we’re powerless to do much about it.”
The workload has led not only to delays, but also clerical errors.
“The insurance companies are so overloaded that they’re making mistakes on top of the wait,” said Maddock. “Some groups, there’s already a delay, and then they finally get their insurance cards and the wrong information’s on them. It feels like a total disaster sometimes — it’s a big inconvenience, but it almost couldn’t be avoided.”
And just because 2013 is in the rearview, it doesn’t mean there aren’t still new plans to be filed and processed. The deadline for individual plans is March 31, and Maddock sees a potential rush coming there, as well.
“There’s a lot of people without insurance right now, especially because some people had to drop out of group plans that employers couldn’t afford,” agreed Ron Bruchet, president of GHB Insurance. “On the individual side, it’s still a little crazy. We’re getting a lot of calls on the individual market.”
And while the volume of work has certainly calmed down from the rush at the end of December, there are enough new and extant inquiries that some in the area have had to add personnel to keep up.
“I’ve had to hire more people to maintain our business just because everything is more complicated,” said Bruchet, whose team grew by the equivalent of two full-time workers. “Everything takes more time. It takes more time to meet with a client now because we have to explain all of their options. Many times, I’ve been on the phone over an hour or meeting in person over an hour with an individual trying to help them get through the exchange.”
Free doesn’t see the situation changing much any time soon.
“It’s going to be like that,” he said. “When you have a reform this far-reaching, you’re going to have that. And that’s OK — well, I don’t know if ‘OK’ is the right word — but that’s normal, per se. The good news, I guess, is that in general, I think insurance professionals in this area have been diligent and well-informed and proactive about getting well-informed, if they weren’t already.
“But I think that’s how it’s going to be for us for a little while. That will be the nature of the beast, so speak. Part of the big change in the nature of what we do as insurance professionals is being prepared to deal with it.”
Fortunately, Maddock said, many clients have sympathized with the difficulties that brokers and providers have faced.
“It’s tough, but I think the clients have sort of understood,” he said. “They watch the news and they’re somewhat informed about what’s going on, too, so they know that we’re having to deal with all of this. It really helps when they have trust in us.”
In a way, Maddock said, the uncertain atmosphere has helped the perception of not only his brokerage, but of the industry as a whole.
“That’s where we’ve actually been able to provide more value, in a way,” he said. “It’s almost like we’re accounted now. We’re not just looked at as selling insurance. We’re advising them on all these different things. It’s a lot more work, but it allows us to stand out more, because there’s so much more to do.”
“In some ways, it’s created more opportunities for us, because it’s made us more relevant. People need help, and we’re doing everything we can to help the individual, the small business owner and the large business owner. Everybody needs help trying to maneuver through this law, since it’s so complicated.”
As to whether the added work will be reflected in the bottom line, Maddock is cautiously optimistic.
“From a business perspective, we’ve actually grown a little bit, because we’re on top of all the laws and rules and regulations,” he said. “Like I said, it’s been a way for us to stand out, and actually, we’ve picked up quite a bit of business, so there is that.”
Just how much the firm has grown, though, isn’t quite clear just yet.
“It’s hard to say,” Maddock said. “We picked up some good group clients from other brokers that maybe weren’t on top of this as much as we were. But on the other side, we also saw some individual plans go away. A lot of those folks dropped their coverage because the new plans are so much more expensive. The numbers aren’t really in to say where we’re at just yet.”
Bruchet is seeing similar — here’s that word again — uncertainty.
“It’s definitely generated new business,” said Bruchet. “But I’ll tell you, I’m nervous about our revenue generated by the individual market, because the dust hasn’t settled. We don’t know which ones [clients] have potentially cancelled their coverage or have gone to the exchange without having our assistance. I think we’re going to be in the positive, meaning we had growth, when it’s all said and done.”
Part of the lack of clarity, Bruchet explained, is due to how the firm receives compensation.
“We don’t even know when we’re getting paid on the people we put through the exchange,” he said. “We’re supposed to get paid, but we don’t know how long it’s going to take.
“If somebody enrolls into the exchange and they’re eligible for the subsidy, the federal government is paying for a portion of their premium,” he explained. “The individual only has to pay their portion. Typically, when the premium is received by the carrier, that’s when the carrier pays us. Well, we don’t know when the federal government is paying the carrier.
“We’ve asked the question, but the carriers tell us that they don’t even know. We’ve asked the question of the exchange, but they tell us they don’t know. Maybe it’s going to be right away, maybe it won’t be. We just don’t know yet.”
In general, though, the consensus seemed to be that while the ACA, in its current form, represents a flawed legislation, its enactment is the beginning of what will ultimately a positive change for the system.
“It’s created a lot more work, and I keep reminding my staff that first of all, in the common good, this is a great thing, because it’s going to get people to where they have coverage,” Holcom said. “Now, we aren’t into the Medicaid system, and we’ve had people come who are clearly going to be going into that system. We want to help, and we do — so we’ve done a great deal of help for the community in that way, but it isn’t doing anything for our business revenue. Still, we’ve created the time to be able to do that, because we feel that it’s important if we have to do that.”
“It is important,” echoed Free. “How I look at it is that it’s an investment in our future. We’re having to deal with all these headaches now. People are disenchanted about their premiums going up, and I don’t blame them. Who can? But in the long view, the old way was broken, and this will eventually get us to a point where more people will have access to care.
“I certainly can’t speak for everyone else,” Free added. “Of course, I don’t like having my work world turned upside-down. But let’s see where this leads us.”