Confuse & Delay Is Always To The Advantage of The Incumbent

A risk pool of more than 20,000 member lives composed of an aggregation of Texas public school districts is looking for a home. The pool has suffered significant underwriting losses necessitating a mid-year cash call to the tune of millions of dollars to pay claims and cover expenses. A run on the bank appears imminent.

A September 1, 2024 renewal date is fast approaching. A promised renewal offer is set for May and must be accepted by each participating district by June 15. Most districts will wait until June 15 to make their election as to whether to stay or leave. That only leaves departing districts 30 days to implement an alternative program in time for Open Enrollment.

A May 15 renewal offer cannot be firm without knowing what is left of the block and that will not be known until Jume 15. Therefore there will be numerous conditions and contingencies attached to the offer which member districts should take note of. If more than 10% of the block leaves, it will take days and maybe weeks to firm up the renewal.

Losing a large block of business like this means an enormous revenue loss for the broker. Self-preservation motivates the desire to provide as many renewal options as possible. Therein lies the basis for delay and confuse, a proven retention method employed ever since the beginning of time.

Renewal options include shopping the market far and wide with the message “I have a 20,000 member block, how bad do you want it?”

BUCA reps. salivate over the prospect of writing a monster group like this. They scramble to please. Let’s take this case on a flyer and underwrite it later. We can run off the dogs on renewal!” is their message to upper management.

So here comes the renewal, or should we say renewals. Spreadsheets are produced showing scores of different options to choose from including offers from Blue Cross, Aetna, United HealthCare, Scott & White, Cigna, TASB, TML and others.

“Mr. Superintendent, here’s your renewal. It’s not quite firm yet but it’s a good indication. There are 14 conditions and contingencies that will affect final rates whenever we get around to that. In addition here’s a Blue Cross offer just for your district and here’s a Blue Cross offer through the pool should everyone else in the pool buy it too. And here’s a Blue Cross proposal through TASB with lower rates if the rest of the pool buys it but slightly higher rates is sold individually to each district. And here’s an Aetna proposal. You will note Aetna is offering 78 options, let’s go through them shall we…………? Oh, by the way, we have a great quote from United Healthcare that’s to die for! They are offing some really interesting options, a HMO, EPO, Narrow Network, POS and an ACO………………..”

With this many options how can a decision be made quickly? That’s the point.

Gun-shy district administrators are nervous, unwilling to make a decision that could end up getting them fired if they make the wrong one again. Time ticks by. No decision is made. Then, just days before September 1 a Spinning-Wheel Dart Board is unveiled at the Board of Trustees meeting. Suspense reigns as the President of the Board throws the dart. Inertia, a first cousin to Confuse and Delay, slows the wheel, exposing the Board’s decision to gasps in the audience.

The spinning board options are many, almost all represented by the risk pool’s broker. He will win by losing or win by winning, all made possible by Confuse, Delay and Inertia.

He who has data wins. He who has good data wins a lot. He who has real time data wins all the time”