On January 23, 2014 Moody’s downgraded the health insurance industry from stable to negative according to the Washington Post.  There are several factors pointing to this decision which are all tied to the shaky rollout of the ACA or Affordable Care Act or better known as Obamacare. According to the Washington Post article, the Moody’s downgrade factors included the website backend issues, low and slow enrollment, especially with younger healthier adults, uncertainty of rule changes and penalty enforcement, the cancellation of non compliant insurance policies and people forced to change physicians and hospitals, higher than expected premiums arethe beginning of many changes to come. What about the health insurance agents roll in this process? How did they fair?

Let’s take a look at the numbers. According to the industry there are roughly 400,000 licensed life and health insurance agents in the United States at the end of 2010. This was a decrease of over 30,000 agents from just 2008. The industry predicted a growth of over 20% with the introduction of Obamacare. Which now we realize is not the case in 2013. However, according to USA Today,only 70,000 health insurance agents were considered certified to sell Obamacare plans. According to Reuters, as of January 2014, the national enrollment of Obamacare is just over 3,000,000 people. Since the inception of Obamacare health insurance commissions to the agents has been slashed by over 70% and it most cases just a small nominal fee is paid to the agent for enrolling someone. So, just purely mathematically the average health insurance agent enrolled about 42 clients with an average commission of $252 per person, made about $10,584, well below the poverty rate. How are these life and health insurance agents going to survive?

The only way these licensed life and health insurance agents can survive is to be able to “up sell” these health insurance clients with supplemental insurance, disability insurance, dental and vision insurance, and life insurance. These plans still are important to the client and allow the agent to make large commissions on these premiums to offset their loss of health insurance commissions. Because the vast majority of licensed life and health insurance agents are independent contractors no one sees the decrease in numbers of the 30,000 agents that left the industry showing up in unemployment numbers. This is another unsung causality of Obamacare.

I being a licensed life and health insurance agent for over 21 years do believe Mr. Obama in his campaign speech to a union group in 2007 that the final objective is to have a single payer system or socialized medicine in the United States sooner rather than later. This WILL ultimately put the health insurance agent out of business. Plan well comrades!

“By failing to prepare, you are preparing to fail.” ― Benjamin Franklin

Image by Stuart Miles at www.freedigitalphotos.net

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Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, entrepreneur, insurance agent, life insurance broker, salesman, sales trainer, recruiter, public speaker, blogger and team leader with over 26 years of experience in sales and marketing in the insurance and beverage industries.