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Thursday, November 20, 2014


I concur with the premise that every Human Being should have Health Care Insurance, but unfortunately the AFFORDABLE CARE ACT Law (OBAMACARE) places the Jobs of all Licensed Insurance Agents at risk.

WELLPOINT Insurance company and CONVERGYS Call Center CEOs pander to Politicians for OBAMACARE Funding but they treat their Licensed Insurance Agents like DIRT!

Especially in Right-to-Work states like NORTH CAROLINA where companies such as WELLPOINT and CONVERGYS force Licensed Insurance Agents to illegally Solicit & Sell Health Care Insurance in States where they are NOT Appointed!

Article Sources: Forbes,

**ARTICLE: "Insurance Agents Lose Job Security With Obamacare Ruling"**

Much has been discussed in the media about most of the aspects of the Supreme Court ruling on the Affordable Care Act, or “Obamacare.” I have not seen much about the plight of more than 100,000 insurance agents and brokers.

The floodgates are about to open for the mass firing of Healthcare Insurance Agents.

The Patient Protection and Affordable Care Act dictates that health insurers must spend at least $0.80 of every $1.00 in premiums collected on health care in the individual and small group markets, and $0.85 in the large group market.

Insurance agents represented by National Association of Health Underwriters tried hard for the government to define their commissions as part of the medical expense and failed. The argument by insurance agents was a senseless argument.

Obviously, financial constraints are such that health insurance companies are being forced to develop new products that are suitable for the 30 million uninsured Americans who will soon be insured under the law. There will be no room for commissions in the new lower cost products.

The other big development is the advent of healthcare exchanges under the new law. These exchanges are not yet up and running but it is easy to picture them to be akin to (AMZN) by necessity and by law, insurance companies will have to display their products in easy to understand and easy to compare formats. There will be a huge migration of business from traditional healthcare insurance agents and brokers to the exchanges.

In some ways, the migration will be similar to the migration of retail from the likes of Best Buy (BBY), Barnes & Noble (BKS), and Borders to At least in retail there are numerous good reasons for the masses to go to the brick and mortar stores. With regard to health insurance the argument for procurement through agents is very weak. Some consumers may continue to use agents simply because they are creatures of habits.

Make no mistake: the volume of business underwritten by agents will dramatically drop.

To date, large insurance companies such as WellPoint (WLP), United Health (UNH), Aetna (AET), Humana (HUM), and Cigna (CI) have been reluctant to fire agents but it is all going to change after the Supreme Court’s ruling. Before the ruling, an insurance company would have justifiably been concerned that if it fired agents or cut their commissions deeply, they would simply promote products of their competitors. If the Supreme Court were to have overturned Obamacare, the decision to terminate agents would have backfired.

Now with the clarity of the Supreme Court ruling, the floodgates for the mass firing of healthcare insurance agents are about to open.

**ARTICLE: "What Obamacare May Mean for WellPoint in 2015"**

Few health insurers cozied up more closely to Obamacare than WellPoint (NYSE: WLP ) , the nation's second-largest health insurer.

WellPoint already serves millions of people through its widely known Anthem brand, and the company participated in 14 state health insurance exchanges during the Affordable Care Act's first open enrollment period.

WellPoint's shoot-first approach to the exchanges and the company's good fortune in managing Medicaid plans in multiple states that embraced Medicaid expansion are expected boost the company's membership rolls by as many as 1.65 million people this year.

That would be well above the company's January prediction for 1 million new members.

That membership surge is resulting in better than anticipated sales and profit for the company, so let's takes a closer look.

The Affordable Care Act health insurance exchanges held their first open enrollment from Oct. 1, 2013, to March 31 of this year. Despite a disastrous launch riddled with technical glitches, few would argue that the exchanges failed in their mission to enroll the uninsured. More than 7 million people signed up (and paid) for health insurance through the exchanges during that six-month period.

But Obamacare did not rely solely on the exchanges to boost insurance membership. The ACA also included a state opt-in Medicaid expansion that resulted in membership in that healthcare program growing by more than 8 million people, too.

The combination of spiking health insurance and Medicaid enrollment is mostly offsetting widespread fear leading up to the ACA's implementation that insurers would sag under the weight of new, more costly members.

Instead, insurers such as WellPoint appear to be thriving. In the third quarter, WellPoint's sales advanced 4.3% year over year to $18.4 billion, leading to earnings per share of $2.36.

WellPoint's membership grew by 259,000 people from the second to third quarters of 2014, bringing total membership served to 37.5 million, an increase of about 2 million from the year-ago period.

The company's commercial and individual markets business, which provides insurance plans through employers and directly to individuals both on and off the exchanges, delivered sales that were essentially unchanged from last year. The flatlining top-line results for the segment are due to employers casting off part-time workers, which offset growth in exchange enrollment. Nonetheless, the ACA appears to have delivered for the segment in terms of operating gains. During the third quarter, segment profit jumped 28.7% year over year to $915.7 million thanks to margin growing from 7.2% to 9.3%.

The ACA had a reverse impact on WellPoint's government business. Sales tied to Medicare, Medicaid, and other state plans grew from $7.77 billion a year ago to $8.55 billion this past quarter, but its operating gain dipped by 3.6% to $284 million. Medicaid costs tied to expensive next-generation medicines like the hepatitis C drug Sovaldi, along with falling Medicare enrollment, were behind the unit's sluggish operating profit.

However, the two business units combined to present a broadly healthy -- and growing -- company with middle single-digit sales growth and 19% operating profit growth last quarter.

WellPoint has steadily bumped up its earnings outlook this year as it has become increasingly confident in its post-reform patient mix.

Heading into 2014, the company thought it might deliver full-year EPS of at least $8; however, the company's 2014 forecast in exiting the third quarter now stands at no less than $8.83. WellPoint has also increased its full-year revenue forecast from $73 billion exiting 2013 to between $73.25 and $73.5 billion. While worries persist that enrolling higher-cost members through the exchanges will create a significant expense headwind for WellPoint, the company's guidance for benefits expense of 83.3% this year suggests those concerns remain overblown.

As the second open enrollment period for the healthcare insurance exchanges begins on Nov. 15, and more states will expand Medicaid coverage under the ACA for 2015, WellPoint appears positioned nicely to capture additional growth next year. As many as 14 million Americans might be covered through the exchanges next year and state Medicaid officials expect enrollment growth to accelerate, rather than decelerate, through next June.

According to a Kaiser Family Foundation survey, Medicaid enrollment in fiscal 2015 ending next June will have jumped by 18% in the 28 states participating in expansion of the program; that would be up from 8.3% growth reported for fiscal 2014.

The key for insurer profitability will remain to price plans appropriately to cover medical care costs while maintaining margin. Given that WellPoint has a full year of experience under its belt, it wouldn't surprise me if plan pricing provides more margin support next year. If so, industry watchers might find that their estimate of $9.31 in EPS for WellPoint next year is too low.

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