As the Supreme Court is expected to hand down its decision on health care reform in June, the speculation continues regarding the anticipated outcome. Although the Supreme Court could completely overturn health care reform, it could also only remove the individual mandate but move forward with the exchange system, which is what Ron Goldstein, founder and president of CHOICE Administrators, a developer and administrator of health care exchanges in Orange, Calif., expects to happen.
"I think the Supreme Court could strike down the individual mandate because there is little precedent that supports the government requiring everyone to buy health insurance, but I don't think they're going to get rid of guaranteed insurability," Goldstein says. "My gut feeling says we're just too far down the road."
But even if Goldstein's gut feeling is wrong, he still believes many states, such as California, Washington and Oregon, will move forward with establishing a state exchange program. These states, in particular, have already started the process, and to be successful, brokers must play a vital role, Goldstein says.
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Goldstein says brokers have always been part of the insurance sales process and will be needed to help navigate through this new exchange system, especially among small groups and certain individuals. In fact, with the exchange system, brokers could play a more valuable role than ever.
"The majority of insurance sold around the insurance is probably broker driven," Goldstein says. "Very little insurance is driven without brokers." "Brokers' roles aren't changing; they just have to embrace what's going on," Goldstein says. "You hear a lot of Chicken Little out there: 'The sky is falling! The sky is falling!' Well, if the sky is falling, get an umbrella."
While brokers are expected to play a necessary role in exchange programs, Goldstein also believes brokers will continue to fight the battle against falling commissions. Goldstein remembers, for example, when he first came to California, broker commission was at 10 percent, but that figure has now fallen to 7 percent. Although the commission rate could possibly fall again, Goldstein believes this is just an opportunity for brokers to focus on their businesses and gain more clients.
"Brokers have to understand that if they have 100 clients today and they need 130 to make the same money, then they should go out and get 150 clients," Goldstein says. "If brokers start now and build their blocks with more clients, they'll be invaluable in 2014 when it comes time to walking their clients through the exchanges."
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