A contributor to Forbes magazine argues in a recent article that Obamacare will fuel consumer demand over time for insurance policies outside of the exchange.
Contributor Scott Gottlieb, a physician and former senior official at two federal agencies, explains the potential “insurance death spiral” that Obamacare could fall into. Due to the Affordable Care Act’s failed launch, there’s a chance that only the sickest beneficiaries will get into the insurance pool, he writes. That causes the cost of medical claims to rise, subsequently forcing future premiums to climb, too. The higher premiums discourage healthier beneficiaries from buying coverage, and so goes the downward spiral.
Gottlieb argues that exchange health plans will have to shave down their networks and benefits to control costs, while plans outside the exchange can offer lower pricing because they aren’t subject to the same risk pool. Conforming and non-conforming insurance policies sold outside the exchanges will therefore look increasingly attractive to consumers, he writes.
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