The Value of Agents

So far I’ve received only one comment on an earlier post, “Agents Need to Deliver Value — And Let People Know About It.” The author of the comment, Dr. Zagreus Ammon doesn’t have much nice to say about agents and brokers. “Based on my experience, most agents add very little value and are generally a waste of time, effort and oxygen”, he writes. “Being so behind the scenes, they suck a significant amount of money out of the health care system returning little.”  Dr. Ammon, who has practiced in Canada, now works in Maryland and maintains his own blog (The Physician Executive), has given health care a great deal of thought. He’s come to the conclusion a private health care system is preferable to one run by the government. This leads him to begrudgingly conclude that agents are “a necessary evil.”

Needless to say, this isn’t the reputation agents want to be building. Nor, I believe, is it accurate. True, some agents fail to deliver anything worthwhile to their clients. The majority, however, deliver a great deal. Yet here is Dr. Ammon claiming we’re parasites. This opinion is, no doubt, based on his experience. By the nature of such things, his experience with agents is limited, but it’s the only data he has — for now.

I was going to respond to Dr. Ammon, but on reflection I think it would be more interesting to hear from agents and others who read this blog. My guess (and hope) is that it will be a lot. I’m expecting agents will provide examples of how they saved their clients money, how their intervention helped clients get paid on previously denied claims and how they guide clients to the right health plan. In short, I’m expecting agents to explain how we add value to the health care system.

The health care debate is driven in large part by anecdotes. Many of these involve insureds whose claims were denied and had to stand-up to the insurance companies on their own. Agents frequently point out to me that these consumers apparently had not insurance agent. If they had, these agents maintain, the results might have been different. So now’s your chance to provide your own anecdotes — or ask your clients to post something for you. (Just click on the blue comment link at the bottom of this post)

As an agent, you’ve walked the walk. Here’s a chance to talk about it.

15 thoughts on “The Value of Agents

  1. Our agency only sells individual and group health insurance. It has been our experience that most clients, who want or need an individual or family plan, just want it to be “cheap.” They have been used to someone else paying for their health insurance benefits, i.e.; the company!

    We have always maintained the highest quality of knowledge in our industry, yet it’s very disappointing that the bottom line is simply dollars and cents! Even after advising the client they might have to lean hard on their health insurance; they still want a “stripped down” plan.

    So, as we see it, there are very few clients that “value” our knowledge or our time! Simply put, it’s all about the money!

  2. I would like to speak as a CEO of an insurance brokerage that represents approximately 80,000 members.

    We have collectively saved our clients over $150 million in premium costs. The savings we generate each year from negotiating renewals is greater than our total commissions.

    We in a typical year will handle over 1,000 claim issues that carriers have denied of which we ultimately get about 98% paid. We will help in at least 20 life-threatening situations and at least another 100 critical care or transplant cases.

    We will do over 300 open enrollment meetings to educate employees on the plan choices or options available to them. We create and publish over 50 different newsletters and legal updates pertaining to benefits.

    We will provide over 800 hours of Human Resources consulting at no cost to our clients.

    We will generate over 5,000 COBRA notices.

    Just amongst the medical groups and hospital clients that we serve we have saved millions in premiums, helped them adjust their Chargemasters to remain current in the marketplace, helped them negotiate their provider reimbursement contracts, dealt with union contract negotiations, settled 4 employee litigation claims, provide sexual harassment and HIPPA training to their staffs and helped create a plan for one hospital to emerge from bankruptcy.

    I think to say that the agents do not add value is to misunderstand the true role of an agent. We do far more than just “sell” insurance we provide real service and support to individuals and employers.

  3. The individul health care market in California offers over 160 plan choices with reliable carriers,small group offers over 250. This gives us a wonderful choice of plans so individuals and groups can really aquire coverage that is legitmately tailored to their specific needs and budgets….Low deductibles,high deductibles,hmos,ppos,pos plans,maternity,plans that cost less if you dont smoke etc.

    But how does a layman navigate the options? Frequently we run into someone who has made an online purchase and, after reviewing the benefits with an experienced agent, realized he had no idea about many of the policy limitations and also how he could have made a far better decission with professional guidance. So what is it worth at claim time to have made the best choice of coverage? Possibly access to the physician you wanted, savings of tens of thousands of dollars, access to drugs that may run thousands of dollars. I personally take a drug that at retail would run $4,000 plus per month. My co-pay is $50.

    As I am certain my professional collegues have done, I have rescued people who were facing major problems. One who was already at UCLA facing a $90,000 brain surgery. We were able to get coverage into place prior to the surgery. We had a second case for a pending liver transplant: $300,000. The claim would have ruined the family, but coverage got into place first. Last year a group client had a temporary cash crisis and his 30 employee group plan would have been cancelled with an employee in the hospital. We fronted an $8,000 premium to get them through the month. I know these are not rare stories, just the stuff of good, reliable agents throughout our industry.

  4. Back in March of this year my best friend was complaining to me about how expensive his health insurance (2 employee group) had become. Since we had lost touch from time to time, I WASN’T the broker on this case. He had a BCC plan. After reviewing it and asking him some key questions concerning his needs, health spending issues etc. I recommended that he move to a HSA plan since his wife was coming off and going on to a medicare supplement (Kaiser). He agreed and I found out a few months later that he was hospitalized for the first time in decades in late May for a severe insect bite (probably a poisonous spider). Because of my advocacy HE SAVED about $4,000 in hospital out of pocket expense. I didn’t make a dime on this and I did not coerce him to change brokers at that time. I receive calls periodically from friends and clients that usually involve similar advocacy issues. I think that the good doctor should see if ALL those in his field operate similarly. There are good and not so good in all professions.

  5. Just as not every doc is perfect, not all health insurance agents are thorough, conscientious and caring.

    I am delighted to see the reaction. I learned more about what you do and its nice to know that some of you go the extra mile. To the commenter on my blog, I probably do need to be a little more proactive with our HR department and our agents.

    It was not my intention to indiscriminately deride an entire profession, but certainly highlight that accountability is more important in health care than many other aspects of human activity. This goes for doctors, who are usually held to a fairly high standard, but also insurance agents, benefits managers and maybe politicians now as well… For every one of my colleagues who doesn’t pull their weight, there is often hell to pay. It should be the same for the insurance industry as well.

    Anyone who does not add value needs to look for a different field.

  6. I could easily take offense to Dr. Ammon’s comment’s on the value of an agent, however, I don’t want to waste any breath on that one.

    Just as there are many doctors, but not all are great physicians, so to with any field of practice, including health insurance agents. However, I could give the good doctor many physicians from Cedar Sinai Hospital and many other reputatible hospitals here in California who would be happy to attest to the services I provide and the expertise I offer.

    Having policiticians design a “health care delivery system” that they will NEVER utilize may never work. As taxpayors, we pay for our policitians health insurance coverage. We cannot buy what they have and they will not be covered by MEDICARE. So, politicians do not have the VESTED interest that those of us who depend on this coverage do.

    I’m glad to see dialog happening and politicians getting involved to help eliminate the problem of the uninsured and high risk. However, every American must realize that “good competent health care” comes at a price and it is our responsibility to budget for “health insurance” just as we must to cover the risk of driving.

  7. Last week I spent an hour and a half on the phone with an individual prospect explaining the differences between a PPO plan with a fixed office visit copayment and deductible, a no deductible PPO plan and an HSA plan. We also discussed 3 different carriers in addition to all the plan design options.

  8. If Dr. Ammon believes that Agents provide very little value to the families and business providing the services, then perhaps it comes from ignorance on his part about our industry. We do NOT just sell health insurance, we, in my opinion, provide education, support and guidance. Doctors won’t spend the time to guide patients through their medical issues. They just write orders and spend as little time as possible with the patient and certainly none of that is going to help with the claims/bills that the patient will receive when they are ill or need surgery. This is when you find out if the Agent has done the right thing for you. Most people feel the language is too complicated to understand and don’t necessarily have time to figure out all the different plans offered and which would best suit them in ALL situations. Every one thinks of needing Doctor visits and prescriptions in their medical plan. But what about In Patient and Out patient services and therapy, etc. These are sometimes things patients don’t realize until they use it and then it is too late. You need someone like an Agent who is experience and can look at the whole picture and point out in simple English what would be covered under the plan.

    I recently had a Heart Attack (at age 45), and was glad that I had good medical coverage. But the most important thing to me was that I only had a $7,000 out of pocket total cost to me and my family instead of the $150,000 that the insurance company paid. I knew what to look for, but without an experienced, caring Agent to review and make suggestions on different plans, do patients really know before hand (before a major illness) what they need???

  9. Yesterday I helped convince a carrier to switch a member from one plan to another off anniversary due to a clerical error. And I contacted a member with a child receiving treatment for a serious condition in order to provide benefit material and offer help when needed. Tomorrow I will be reviewing plan performance with yet another customer. Its shaping up to be a slow week.

  10. “Perhaps it is the “cost” of oxygen that is driving up health care costs!

    Today, I was referred to a 62 year old, disabled, Medicare Advantage Plan individual.
    She is paying for out of network office visits and medications because her current plan did not cover the medications. First, I recommended she contact her physician to make sure her treatments were eligible Medicare expenses. The office told her, “yes, we bill Medicare for several of our patients and your treatments are a covered expense.” Then I confirmed her medications would be covered through another Medicare Advantage Plan. Because of the November 15 open enrollment, she will be able to enroll in another Medicare Advantage Plan, see her physician of choice, get her medications covered and her premium will be reduced approximately 40%. I do not have enough “oxygen” in one breath to tell you how happy she is to be working with an agent.”

  11. A few years ago a client had successful outpatient orthopedic surgery. When he received the facility’s statements, the amounts not paid by the insurer were extensive. He contacted me because his efforts to deal with the carrier were unsuccessful. I was able to research the surgeon and found out that he was in the carrier’s network. He was also on the staff of a major hospital within one mile of his office plus 4 free-standing surgical centers, each one also within one-mile of his office. All were in the carrier’s network, except one. You guessed it-the one not in the network was where the surgery was performed. Why you might ask. Well, it just happened that the surgeon was one of that facility’s owners. When I brought the facts to the carrier’s attention, the problem was solved and there was no further balance billing.

  12. Dr Ammon may be a respected physician, but obviously doesn’t have the foggest idea what the professional health agent does. Just today I provided alternative sources for a woman who’s Medicare part D plan fell into the donut hole. Her savings over the next three month; $329.57. Another client was referred improperly to a specialist not in the HMO network. I have trained the physician proper procedure, and will work with the specialist to get the cost of the delivered services reduced. A Senior Citizen was over charged $100 on his pharmacy plan. After my intervention he will receive a refund.

  13. I am very aware of agents who add little to equation except to expose employers to the marketplace. For many years, we have sent surveys to the employees of our clients and ask they be returned to us before we meet with the client. We have the employee rate their experience with providers as well as the outcomes when they call our office. Out of the 1200+ issues we handled for clients over the last 12 months, 90% of their responses indicated that they received good or excellent outcomes. Those issues might involve counseling employers and each employee about what options best suit their needs, removing barriers to getting care or getting it paid as well as a myriad of other snags that are just part of life. I think the experience with the HIPC/PacAdvantage spoke clearly to all of this. After a short time, they decided it was easier to pay the brokers to do this service than try to do it themselves. Personally, I would like to see contracts include stronger language about what we have to do to earn our keep.

  14. Without using too much oxygen I had a Medicare supplement reinstated because the couple lost the premium statement. I got a carrier to reopen a claim because it was coded incorrectly. I got an employer to pick-up a month of CAL-COBRA because they erred on the termination date. This was just Monday.

    Dr. A seems to be territorial. Every penny that doesn’t go to actual care is a waste. Not true. People who choose to purchase on their own constantly screw up. They feel they are doing research when in fact they are looking for the cheapest. They can’t make an apple for apple comparison.

  15. I beg to differ with Dr.Amman. Let me provide just one example of the service agents glady give to our clients:

    A valued client of many years recently had a massive heart attack in the middle of the night. The ambulance took him to the nearest hospital. At 7 am I received an urgent phone call from the HR Director of his company concerning this client’s HMO benefits since he was hospitalized out-of-network. I answered her questions and very shortly thereafter I went to the hospital to meet with his wife. The client’s family didn’t want to talk with an anonymous 800 number at the insurance company — they wanted a caring person. I know it gave them peace of mind to know I was there. When he was stabilized and transferred to his HMO-contracted hospital the family had questions concerning which specialists he should see. I made several calls to a friend of mine who is a physician in the area and was able to offer excellent guidance. I think if you’d ask my client, he would strongly disagree with Dr. Amman’s opinion of insurance agents.
    Meg McComb

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