We work with prospective clients all across the country who need to purchase health insurance. Oftentimes, the client wishes to know why they should use a health insurance agent to complete the transaction. In other words, why shouldn’t they just buy direct from the company? There are several reasons to use an independent agent including price, knowledge, availability, healthcare reform and service.
It is important to note that health insurance premiums are controlled by law. No agency, agent, or company has the power to undercut their competition. In essence, you are buying direct no matter what channel you use.
Consumers often will tell us that they are shopping for the best health insurance rates. While rates for similar plans will vary between competing health insurance carriers, the exact same plan with the exact same company will be identical in price from all sellers – including the carrier itself. An agent, however, will know which providers are more affordable depending on the client’s needs.
Certain carriers are more affordable in different niches; whether it be family coverage, individual plans, short term polices, maternity, etc. An experienced agent can quickly help shoppers narrow down their choices. Speaking hypothetically, if you are working with a representative from the Anthem home office, do you think they would tell you that you can purchase similar coverage with Golden Rule for less? And when premiums increase year over year, the agent will be available to help the consumer lower their rates by either selecting a new plan or a new carrier.
This may be the single most important area that consumers need help with. Understanding health insurance jargon and plan differences can be quite difficult – especially with all of the changes brought on by healthcare reform. It is the agent’s job to explain the advantages and disadvantages of all available plans. Insurance coverage can be very comprehensive or only catastrophic in nature. If the consumer purchases a poorly understood plan, there can be negative consequences in the future.
Consumers may not understand any shortcomings without speaking to an experienced agent. The insured needs to know how the plan works, when the insurance will pay, how coinsurance works, what the waiting period is for preexisting conditions or maternity, prescription drug coverage limitations, doctor’s office copay options, and the tax advantages of a health savings account. This knowledge is paramount when selecting appropriate coverage.
Underwriting practices can and will vary dramatically between competing health carriers. If the potential insured has certain preexisting conditions, some health insurance providers will not underwrite the insured under any circumstances. The consumer might be wasting valuable time by making an application.
To further the point, some companies will only underwrite to an accept/decline decision while others might accept the new insured but not cover a preexisting condition. Companies that use the accept/decline standard can raise the overall monthly rates for the insured depending on his/her build and or health history.
However, companies that issue polices with exclusionary riders can be a good choice for someone who has been declined elsewhere. The length of the exclusionary rider can be short in duration or indefinite. At the very least, the insured will have coverage for any unknown future health concerns.
Knowledgeable agents will know where consumers will have a better chance of being underwritten for coverage. The difficulty of underwriting only reinforces the notion that it is extremely important for consumers to purchase health insurance while they are in good overall health. There are very few advantages in waiting.
Editor’s note: There are no longer waiting periods for maternity or medical underwriting practices due to healthcare reform.
When consumers buy direct, they may be inadvertently limiting their options. Independent agents will be licensed with several competitive companies. Not all plans are offered in all states and some benefits like dental, vision, and maternity might not be available where the consumer resides.
Network availability can also be tricky. While most carriers offer coverage in most states, there can be significant limitations to the doctors and hospitals that are in the plan’s network. And some carriers offer several networks to choose from when the policy is purchased. An agent can help you select a reliable carrier in your area and most importantly one with a strong network. Staying in network for coverage can save the insured thousands of dollars should a significant claim arise.
This may be the most overlooked yet most important reason to retain a good agent. Undoubtedly, questions will arise for the consumer. Of course, there will be several inquiries before the plan has been purchased, but what about service while the insurance is in force?
When the consumer buys direct from the carrier, they will be hard pressed to find an agent who will help them service their policy. After all, we are not volunteers. And most people do not enjoy long hold times when calling the carrier directly.
However, when insurance is purchased through a agent, they can be your resource for questions and answers. As an agent working in this business for over eleven years, I can attest to the fact that policyholders have many questions about changes to or explanations with their in force coverage. While it may seem trivial now, the agent can be a valuable liaison in the future – so it is counter intuitive to subtract him from the equation.
Purchasing health insurance through an independent agent is oftentimes the best means to an end. It does not cost a penny more and the agent’s knowledge and experience will result in much less work for the prospective insured. In reality, there is very little reason not to use an agent.
Hyers and Associates, Inc. is a leading independent agency offering direct to consumer medical and health insurance plans across the country.
Category: Health Insurance