As I am just starting this blog I ask myself, “What is the difference between a blog and a soapbox”. So far, I think the only difference is that if I were to stand on a soapbox on a street corner I may get heckled. So here I sit in the comfort of my office able to expound on my thoughts and allow you a peek into my insights into the insurance business.
I hope I may offer you a couple of surprises as many of my opinions may not be the ones you would typically expect to hear from an insurance agent. For example, I recently received an email from an insurance company that was asking all agents to contact their Senators and Representatives and urge they reconsider President Obama’s health insurance reform proposals. They even provided all the information to contact your representatives as well as what they “suggested” we say or write. I will point out at this stage that I am making a broad distinction between insurance companies that offer Medigap policies and those that offer Medicare Advantage plans. These proposals were a major part of President Obama’s campaign promises. He stated that he wanted to end the corporate welfare to insurance companies. The proposals would reduce the reimbursement rates to Medicare Advantage plans to amounts more in line with what the Government would spend for a retiree on traditional Medicare.
The Medicare Advantage plans were originally designed as a cost saving proposal for the government where the insurance company would receive approximately 95% of the traditional Medicare allotment. However, in practice once the insurance companies figured out the rules that 95% payments soon ballooned to between 112 ~ 114%. So now the insurance companies do not want to see these reductions as they recognize that many people will opt out of the Medicare Advantage plans and back to traditional Medigap plans.
I look at this both as an agent whose livelihood is made selling insurance but also as a citizen who tries to use common sense. In my next update I shall go into more details on these thoughts.