Flight to Quality
On March 23, 2010, when the Affordable Care Act was signed into law, I remember my initial sense of resignation. There was so much uncertainty as to what its impact would be on our industry. Putting aside the broader social debate over whether the law would be beneficial for the country (hint: it varied for each individual based upon his / her economic and employment position), as a young actuarial healthcare consultant, I was looking at the 30-year+ career ahead of me and wondering if this would change everything – perhaps jeopardizing my livelihood should employers mass exit the private health insurance markets.
In reality, just the opposite took hold.
The confusion and complexity that overcame the market created the greatest opportunity for healthcare consultants since the HMO wave of the mid-90s. Employers were desperate to receive honest, unbiased analyses of pay-or-play cost modeling. Not to mention the regulatory web it introduced; Patient-Centered Outcomes Research Institute (PCORI) fees, Transitional Reinsurance Program fees, Cadillac Tax cost modeling, 1095 reporting, the Health Insurance Tax (HIT), and on and on. The next several years became a compliance minefield and brought a huge boom of business to consultants who put in the time and energy to understand the law and consult accordingly. Yes, many smaller agencies without the sophistication and resources got wiped out or were forced to sell. But the industry did not suffer – there was simply a huge flight to quality.
Fast forward to the pandemic of 2020, and it appears a similar phenomenon is taking hold.
After initially weathering the shock and concern over the well-being of our families, employees, and clients, a new reality seems to be taking hold. Employers are figuring out what modernized benefit programs must look like in this new world order. Technology. Communication. Product offerings. Pricing. And they need the right consultants to support them through this process. Already, there have been reams of regulations emanating from the Coronavirus Aid, Relief, and Economic Security Act (CARES) that has forced employers to think quickly, and mass misinformation in the industry about whether the pandemic would cause a spike or decline in costs which I covered in an earlier Viewpoints article. Over the last few weeks, we have been seeing more inbound prospecting opportunities than we had in recent times and it’s a trend I believe will continue. Not to mention all the in-force clients that are leaning harder on us for up-to-the-minute and accurate around-the-clock guidance.
Indeed, it appears 2020 is shaping up to be a lot like 2010, with a huge flight to quality taking form. Our eye remains firmly on the ball – we understand what our clients and prospects need at this time and will continue to meet the demand.