It’s no secret that healthcare costs are spiraling out of control. One recent report found that U.S. households shelled out $3.5 trillion on healthcare in 2017—an average of $10,739 per person. That’s a ton of money no matter how you slice it.
Benjamin Franklin may have been on to something when he said that the only certainties in life are death and taxes. If he were alive today, however, he might add a third certainty to that statement: that healthcare costs would rise in perpetuity.
Of course, resources are finite, so costs can’t rise forever. Otherwise, no one would be able to afford health insurance or related services.
Suffice it to say that something needs to give to make health insurance more affordable.
If the Trump administration has its way, that something might come in the form of enabling insurance salespeople to sell health insurance across state lines.
The Current Problem
Currently, citizens have to buy health insurance from companies operating in their own states. This inefficient system has resulted in scenarios where comparable insurance plans can cost more than twice as much in one state as they do in another. For example, someone in Indiana might pay $339 per month for insurance, while someone in nearby Iowa might pay $762 per month.
To remedy this situation, the Centers for Medicare and Medicaid Services (CMS) recently put out a request for information that could help it determine which regulatory, operational, and financial barriers might exist surrounding potentially selling insurance across state lines—and what can be done to overcome them. If insurers were able to sell to customers across the country, so the thinking goes, prices would come down as competition would kick into high gear.
“Eliminating the barriers to selling health insurance coverage across state lines could help provide access to a more competitive and affordable health insurance market,” explains Seema Verma, CMS administrator. “We are looking for information and ideas from the public on how to create a more dynamic health insurance market with more insurers participating and competing to meet the needs of the American people just like we see in markets for so many other products and services that enhance our daily lives.”
It remains to be seen whether the government will move forward with allowing insurers to do business across state lines, but let’s conduct a little thought experiment and imagine that it does.
First things first: Selling insurance across state lines is easy with a platform like Quotit. All you need to do is get licensed to sell insurance in other states, and then you can tap into Quotit’s real-time quote engine to sell hundreds of different plans from carriers across the country. In fact, you don’t have to wait for regulations to change before you’re able to sell insurance products in multiple states. Again, you just need to be licensed in each state.
Now that you know how easy selling insurance across state lines can be, let’s take a look at three benefits independent agents, health insurance agencies, and brokerages can expect in the event that they’re allowed to sell insurance products across state lines in the future.
1. You Can Offer More Competitive Pricing
Who doesn’t love getting the best deals—especially when it comes to health insurance?
If insurers are able to sell across state lines, the industry will get more competitive. If you’re able to pass on significant savings to your clients year to year, why would they even consider looking to solve their healthcare needs somewhere else?
Instead of being able to sell only specific state-sanctioned plans from specific carriers, you could potentially offer plans from hundreds of different carriers—making it that much easier for clients to find plans that work best for their unique budgetary concerns.
2. Your Clients Have More Choices
Under the current health insurance landscape, many customers simply don’t have that many options. In fact, a 2016 study found that 21 percent of health insurance consumers were able to buy insurance only from a single carrier.
In an age when clients expect personalized experiences—and they want companies to proverbially bend over backward for them—being able to offer them as many choices as possible is an easy way to make your business stand out from your competitors.
In addition to being able to offer better prices, you’ll also be able to offer a larger portfolio of plans if you are able to sell insurance across state lines.
3. You Can Expand Your Reach and Grow Your Business
Under the existing system, an insurance company that sells healthcare products in Missouri can sell them only to customers who live in that state. The same holds true for each of the nation’s 49 other states—as well as Washington, D.C.
Assuming the laws change, with the right tools in place, insurance agencies and brokerages would be able to sell to customers across the country. All of a sudden, each business would have access to millions of new potential clients.
Of course, if the laws do change, insurance salespeople will need to make sure that they have access to the right tools and technologies so that they are set up to sell across state lines.
Otherwise, they may not be able to take advantage of changes in the marketplace—missing out on a game-changing opportunity.
That being the case, agencies and brokerages would be wise to start preparing for a future that may come soon. By investing in the right tools, you’ll be able to offer hundreds of plans to clients from carriers across the country—the moment the laws change. That’s the ticket to happier customers and a stronger business.