Brokers and advisers are on the right track to success on the exchanges if they’re taking a consultative approach. This is the message of Jonathan Gruber, economics professor from the Massachusetts Institute of Technology and chief architect of his home state’s 2006 health reform that became a blue print for the Affordable Care Act.
“We can think of brokers and advisers as having two roles, a shopping role and an advising role, and I think their shopping role will diminish and their advising role will go up,” he says, echoing his last interview with EBA in March. “I can see brokers going either way, the question is, can they shift more toward the advisory role?”
A study released yesterday from industry researcher LIMRA shows that employers want advisers to rise to this occasion, too. In fact, 94% of small business respondents told LIMRA they think their need for an adviser will either stay the same or grow within the next two years. However, only about half of the employers who currently use an adviser said they’re “satisfied” with them. The most common reason for eliminating an adviser is cost.
“This presents a huge opportunity for advisers who are able to demonstrate their value,” says Mary Boyce, associate analyst at LIMRA Insurance Research.
Gruber has a parallel for success for brokers to think about. “Brokers and advisers … can follow the travel agent model — which is a bad one for them — or the tax adviser model,” he says. “In both cases a new electronic technology came up that could have potentially displaced the advisory role, be it Orbitz or Turbo Tax. But tax advisers are used more than ever now, because they figured out how to supplement that and help folks, whereas the travel agent became displaced.”
The health care economist and past consultant to the Obama administration recently participated in a Sun Life webinar surrounding the Oct. 1 exchange launch. His message to the insurance industry overall is twofold: “Message No. 1 is the typical person in America is unaffected by this law. For most Americans, life will not change on Jan. 1. … Message No. 2 is for the Americans where things will change, there will be a lot more winners than losers … There’s no legislation ever that hasn’t created losers, but what you care about is the ratio or winners to losers.”
As for the current glitches, Gruber is not too worried. “The goal should be that by the end of November most people can get on and for most people it works fine,” he says. “Right now, very few people have been able to get on. … A larger issue in thinking about this law is do we hold it to the standards of perfection or do we hold it to the standards of improvement?”
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